We advise the trustees of a RPT where the beneficiaries (4 grandchildren) are entitled to the trust fund contingent on attaining 18, and if more than one in equal shares. (It was supposed to be a bare trust, but there was a drafting error by the solicitor preparing the original deed).
3 grandchildren have received their shares, the final grandchildren (X) will become entitled to his share this year.
There are concerns about X’s ability to manage the funds sensibly.
The trust was created before 1 October 2014 but s32 TA1925 is extended to the whole of the beneficiary’s share.
In these circumstances, I understand it is possible to use s32 to advance the remaining trust fund into a new trust for the benefit of X at, say, 25. This will not on the face of it be tax efficient (the funds will remain in the RPT regime), but will be for X’s (widely construed) benefit if it avoids him spending the money unwisely at age 18. Is this correct? Are there any pitfalls?