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Inheritance tax position of trust settlement for the benefit of various family members.
We have been asked by a client to advise on his entitlement under trusts created by his grandparents in the 1990s. The trusts were established as interest in possession settlements for his aunt during her lifetime and she died just before Christmas.
Having obtained the trust documents I can see that rather than distributing the funds to remaindermen on the death of the life tenant the trusts continue for the benefit of the grandchildren in equal shares. I believe that these trusts are now considered relevant property and therefore subject to ten-year charges and exit charges.
My query is whether I look back to the original settlors when considering the inheritance tax position of the trusts or is it the life tenant who is now treated as settlor? If it is the recently deceased aunt on what basis would exit charges be calculated given there...
