Apologies in advance, I am not a practitioner however we have spoken to a tax adviser but we are struggling to find someone with the relevant knowledge to assist with a complex matter we have.
A relative has passed away in California leaving behind a US Living Trust. The main beneficiaries are two adults, a 16 year old and a 6 year old, all resident in the UK.
The attorney in California has informed us that the estate is not subject to US estate taxes however the trust did receive approx $200,000 in capital gains income and this is likely to be distributed to the beneficiaries in equal shares and the tax on this would be paid by the beneficiaries.
Our question is how will this be treated for UK tax? Would it be classed as income and subject to income tax on each beneficiary?
The attorney has asked each beneficiary to complete a W-8BEN form and has questioned how the capital gains income paid to the 6 year old would be treated as they don’t have a foreign tax identifying number to enter onto the form.
Thanks in advance for any help or direction you can provide.