TRS and minor beneficiaries

Trusts Discussion
1

The Will appoints the two children of the deceased, as Executors and Trustees. The deceased’s partner has a lifetime occupation in the deceased’s property. I understand that if this arrangement continues for 2years then the Will trust including details of the property must be registered with the TRS.

The residuary estate is divided between the adult children and grandchildren of the deceased. The gift to the grandchildren is contingent upon them reaching 30 years. The amount due to each grandchild is approximately 5k and the grandchildren are now in their 20s. The executors/trustees have requested funds are paid directly to them and that they will distribute the funds when each one turns 30. Presumably the grandchildren need to be declared on the TRS but if their funds are not in trustee accounts as such how is this registered? Setting up a trustee account/investment is proving very difficult where funds under 10k per beneficiary.

2

There are arguably 2 trusts here if the estate contains both the property and other assets. The property is held on trust for the residuary beneficiaries subject to the partner’s right of occupation. The other assets, if any, so far as not distributable to the adults, immediately are held on trust for the grandchildren. If s31 TA 1925 applies the grandchildren will be entitled to their shares of any income arising and this will be registrable as a taxable trust without the 2 year indulgence.

If the property is the only asset there is one trust and the 2 year rule applies. The rules do not require disclosure of the assets of a non-taxable trust. There is nothing to distribute to the residuary beneficiaries unless and until the partner’s interest determines under the terms of the Will.

Jack Harper