We have a situation where an IIP has ended on the death of the life tenant. One of the two appointed trustees predeceased the life tenant and the sole remaining trustee has lost capacity. Although the trust has ended on the death of the life tenant, the liability for IHT lies with the trustees. We have informed the remainderman of the IHT liability attaching to their absolute interest in the asset but is there a need to make an application for a new trustee in these circumstances?
What happens if the remainderman refuses to meet the liability?
In the absence of trustees, how will the remaindermen obtain legal title to the trust assets? Might they be the new trustees?
If the remaindermen refuse to meet the IHT liability, and you are aware of that fact, I wonder if you have a “tipping off” responsibility to HMRC in order to avoid any potential allegation of helping facilitate tax avoidance. Maybe a discussion with The Law Society (or SRA )!
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
If the restriction requires the consent of the trustees to a disposal of the title, I suspect that HMLR (if not a purchaser’s advisers) would insist on such consent being provided. On that basis, new trustees, please!
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
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