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Readers' forum : Plan of action?

20 February 2018
Issue: 4636 / Categories: Forum & Feedback

Transferring trust shares to beneficiary or their spouse.

We have a trust client with one (now adult) beneficiary who has a pre-2006 interest in possession. The trust property comprises shares in a non-trading company that are pregnant with gain. The trustees and the beneficiary are now inclined to transfer some (or all) of the shares out of the trust and into the ownership of the beneficiary or their spouse.

On the assumption that what is set out below can be achieved from a legal perspective we seek readers’ views on the following possible sequence of events.

At the request of the beneficiary the trustees could make the beneficiary’s spouse a beneficiary of the trust with a proportion of the interest in possession within the beneficiary’s available nil-rate band being transferred to the spouse. Some of the shares would be redesignated as a separate class of shares for this purpose.

A charge would then seem...

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