Father took out Life Insurance for £1/3 million and created Absolute Trust for Son (now aged 19). Trustee is non-relative. Trustee has received £1/3 million and has decided that Son is too young to receive money. Father’s Will does not mention Life Policy but leaves Estate to Son on attaining age 25.
Can Trustee do this? Should not Son be declaring any income/gains? Finally, is this a TRS Trust?
Obviously it depends on the exact terms of the trust deed but if Son is an adult and absolutely entitled, T cannot resist a demand for the monies. He would also be at risk of (a) costs of any action to recover the monies and (b) breach of trust for any potential investment losses (or even lost opportunities for investment profits).
Yes, it sounds as thought S is liable for all taxes but it is probably excluded from TRS for 2 years from the death under para 8 Sch 3A of the 2017 Regs.
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