I am really hoping someone can assist me with this.
I have a Flexible Life Interest trust created on 29.10.2016 and the Life Tenant (settlor) died on 20.10.2024. After the death of the life tenant, the trust became a relevant property trust for tax purposes. The Trustees now wish to close the trust and appoint out all of the trust assets.
The assets within the trust are simply £390,000 and are held in a bank account, with no liabilities owed. The amount is exactly the same as the value at the date of death of the life tenant, plus no interest accrued on the account. There have been no additions to the trust, the settlor made no other gifts in the 7 years before the trust was created and no other trusts were created by the settlor.
I am not even sure from attempting to complete the form of the exact amount of tax owed - I see from other posts that the IHT100c may be incorrect. Can anyone give me a ball park figure, so I can establish whether I am completing the form correctly?
4 quarters have passed since the date of death of the life tenant and 31 since the trust was created.
If I understand correctly, this trust was created by the Settlor/Life Tenant, during their lifetime. If so, the trust has been a relevant property trust since inception. In theory, entry charges would apply. Was the initial settled sum more than £325k?
It would also appear to be a GROB, if the life tenant and settlor are the same person.
The death of the life tenant would not give rise to an exit charge (assuming the trust fund is now held on discretionary trusts). This is not a QIIP trust and therefore the trust value does not aggregate with the life tenant’s estate by virtue of their interest as life tenant (but it would be included due to the GROB provisions).
An IHT100c will only be required at the point the trustees appoint out and terminate the trust (assuming the trust fund is now held on discretionary trusts).
I do not believe that the initial sum settled was over the Nil Rate Band, but am checking with the Trustees.
If the trust is a relevant property trust since inception then this would make completing the IHT100c easier. I was working on the assumption that the trust only became a relevant property on the death of the life tenant and therefore assets were added to the trust which became relevant property since its inception, but I take it that this is not the case?