New trusts created - but assets sold!

Any thoughts appreciated on this please…
A Will trust trust was created for 2 beneficiaries, within 2 years of death new trusts were created - one each for these beneficiaries under s.144. However, before the new trusts were created, the original Will trust’s assets (some shares) were sold at a much lower proceeds than that of probate value. The resulting cash was then transferred to these new trusts. The new trusts are now looking to distribute the cash.

Question is, as this is a exit charge before the first 10 year anniversary, what is the initial value for these new trusts? Is it probate value, or the cash proceeds of the sale?

Thank you
Chris Thorpe

You use the date of death value, which is not reduced by any IHT reliefs, which includes any reduction in the taxable value where assets have been sold at a loss to probate value.

Paul Saunders FCIB TEP

Independent Trust Consultant

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