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A client’s will contained a nil-rate band discretionary trust clause and the residue of the estate was left to the widow of the deceased. The estate is below £325,000 and there is doubt as to the entitlement of income from the main estate asset, a property
My client died in 2012/13 and his will contained a nil-rate band discretionary trust clause with the residue of the estate left to the client’s wife. However the value of the estate which includes a property producing rental income is less than £325 000.
The income arising on an asset that is the subject of a specific bequest under the will belongs to the beneficiary receiving the asset. Where the bequest just states a sum of money for the beneficiary (such as £325 000 to a discretionary trust) income arising on the assets used to satisfy the bequest belongs to the residue of the estate.
I am therefore now stumped as to who is entitled to the income and therefore ultimately taxable on the income since it does not belong to the trust. However there is no residue because the whole of...
