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Terminating a trust and distributing proceeds
On the death of a relative my client (now in his 70s) received by way of legacy a life interest in a residential let property with remainder to his stepdaughter.
Both he and his stepdaughter now wish to realise their respective financial interest by selling the property and dividing the proceeds accordingly.
Could Taxation readers suggest what is the optimal way to terminate the trust to achieve this and minimise the resultant tax costs?
Query 19 408 – Trepidy.
Reply by Tobias Gleed-Owen Hewitsons LLP
An actuarial valuation of the life tenant’s interest may be required.
The first thing to consider is the wording of the will trust. Are the trustees given powers to appoint capital to the life tenant and remainderman and to wind up the trust during the life tenant’s lifetime? Is the stepdaughter’s remainder interest absolute – in other words it is not contingent; for example surviving the...
