Promise to Pay Note

I am dealing with an estate that has a nil rate band discretionary trust. The trust holds a promise to pay note which states
" I hereby promise to pay to you at any time of my choosing ( and if not before my death then to be recovered from my estate) the nil rate sum on the following terms -

  1. nil rate sum plus interest on that sum at 2% above base rate from time to time
  2. the whole sum to be paid either as single lump sum or by instalments

My questions are

  1. When does interest run too ? Date of death or date loan repaid ?
  2. I assume interest is calculated for period of time from date of death of first spouse to date of repayment of debt using number of days at relevant rate i.e.simple interest and not compounded

Leanne Wootton
Morris Owen Chartered Accountants

I would interpret this to be simple interest until repayment.

As the debt was not repayable on demand, it could be argued perhaps that the trustees had made a chargeable transfer when they accepted the IOU in these terms.

Simon Northcott