Morning all. I have a 1988 life interest trust, remainder for children of principal beneficiary at 25, overriding discretionary power to restructure for class of beneficiaries including life tenant. Condition on overriding power: “no appointment is to be made which allows any part of the income to be diverted from anyone who would otherwise be entitled for an interest in possession in the trust fund after the appointment”.
I can’t get my head around this - any idea what it is getting at?
The life tenant presumably has an IIP that for IHT is pre-2006 and so is treated as putting the trust fund into their estate; and any exercise of a power which terminates it risks a PET/chargeable transfer. The quoted phrase has peculiar syntax. One would expect that it would prohibit any exercise that would cause such termination in whole or part to avoid that tax risk. An insidious trap might be to exercise it by appointing a new life interest to anyone who currently has one; that might be a valid exercise but a termination so the trust becomes a RPT and the life tenant makes a chargeable transfer.
In Hope and Carney v Burton [2022] EWHC 2770 (Ch) Hopes & Anor (Trustees of the Skandia Life Policy Trust) v Burton & Ors [2022] EWHC 2770 (Ch) (09 November 2022) Emma Chamberlain of Counsel advised in 2017 that two Appointments of 2013 and 2014 might well have fallen into this trap. The judge set them aside in the event for mistake but it is a discretionary remedy and those seeking it were lucky as the other party was out of time procedurally to run an argument that might have changed his mind.
Leaving aside the use of ‘for’ instead of ‘to’ in the quoted condition, as worded it seems to deny any appointment away from the current life tenant. It is difficult to see what wording might have been intended instead.
We were and still are fighting this case, as named beneficiaries.
The Judge who sat in this case would not hear us out, the deed of appointment by trustees, legally should of not been carried out in the first place…the original named trustees of the policy did not appoint the new trustees.
I contacted the original trustees and 1 of them said, he was told to retire, so the executors could claim the funds, he also said, he never saw anynother names on the letter that he signed to retire.
The 2nd original trustee said, he never was contacted, he never knew he was a trustee, or even retired as a trustee, thats if he was a trustee, tue judge would not listen to this.
You stated that if we had more time, for the judge to view this different, what do you mean by this…
When i say that I have evidence to back this up, i do…
Even evidence of the purchase of my house, from the life interest/tenant of the Will, by trustees, they have basically advanced 21 years worth if rent to the life tenent (spouse, 2nd marriage)…
We never knew about this policy until 2021, inev3n have the trustees on a recording, denying a fourth beneficiary, this beneficiary has had their NRB utilised, and the solicitors did warn the new Trustee’s to contact this beneficiary, life tenant/ spouse, ordered the trustees not to disclose any information…
We have been lied to, we are suffering with tax since this came out…
Just guidance we need, we cant afford anything like a solicitor, but, justice we need…
We cannot advise you on here. For someone to advise you they would need to see all the relevant paperwork and also sit down with you and have a detailed conversation, and correspond with the other side of this debate.
If there is enough money at stake would someone take this on on a contingency basis (ie no win no fee)? Alternatively, have you tried the CAB? They may be able to tell you if you have enough of a case to make it worth paying for professional advice.