Outstanding Trust Tax Administration

Trusts Discussion
1

What is Reader’s Experience?

Settlement into Trust by Mother to two daughters in 2011 of Property (in recognition of the Settlor’s natural love and affection and for the purpose of administrative efficiency. Mother does not live in the Property. Mother is still alive. Property let since then.

For the duration of the life of the Settlor the interests of the settlor shall be paramount.

Beneficiaries are:-

1 - Settlor

2 - Children of the Settlor

3 - Remoter Issue of the Settlor.

Income of the Trust Fund “shall be paid to the Settlor for her Lifetime” - and it was/is.

Trustees (daughters considering sale by Trust of the Property). There is a Clause “ subject to the above the Trust Fund shall be held upon Trust for the two Daughters equally.

No tax disclosures made. What is the experience of the Readers in a desire to keep the updating of the tax affairs to a minimum, e.g. could we negotiate that Mum complete Tax Returns as though mandated the Income?

2

You say that no tax disclosures have been made, but presumably this doesn’t mean that the trust has not been registered on the Trust Registration Service? Assuming that it has been registered, when so doing (and assuming that at such time the property was being let), one would have had to have stated at the time whether or not the trustees were subject to tax. For the trust to not be liable, all the income would have had to have been mandated to the Settlor and the Settlor would have had to have returned the income herself.

Paul Storrie

Storrie & Company

3

Hi Paul,

Yes, the client is new and Trust Registration has now taken place,

Ray