Distribution into new trust - but old assets sold first!

A discretionary will trust was established, with trading company shares settled therein. Two new trusts were set up for two of the beneficiaries (within 2 years) with the original trust asset being placed into them equally. However, prior to the split the original will trustees sold the shares (for value below probate value) so the assets going into the new trusts were the cash proceeds. The new trusts now wish to distribute the assets - for exit charge purposes before first TYA, do I use the probate value of the shares as initial trust value? or the cash proceeds? My inclination is to the former as it’s a s.144 scenario(?)
Thank you - views much appreciated

I believe you will use the probate value of the shares, disregarding any IHT reliefs that might have been available (e.g. BPR or loss on sale relief).

Paul Saunders FCIB TEP

Independent Trust Consultant

Providing support and advice to fellow professionals

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