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Readers’ forum: Family settlement

17 December 2019
Issue: 4725 / Categories: Forum & Feedback
Loans by beneficiaries of a discretionary trust.

My client’s parents – who were both UK resident and UK domiciled individuals – set up a discretionary trust in the 1980s. The trust owns property and all the shares in a private limited company and these sources generate income each year. The beneficiaries of the settlement are the client’s children and grandchildren.

One of the trustees is also a discretionary beneficiary of the settlement and receives a distribution each year. They have also loaned money to the trust and do not charge interest. Are there any tax implications to consider relating to the loans? And can the loans from the beneficiaries also be interest free?

The trust has also lent money to the limited company that it owns. The company regularly makes transfers to the trust. Again are there any tax implications to consider or should these payments simply be...

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