A & M trust

[kbarretto]

I have an A & M trust written under a will where the deceased died May 2005. The beneficiaries are to receive the proceeds at age 21. Am I right in assuming that the trustees can (if permitted) vary the terms to provide that the proceeds vest absolutely at age 18 and stay in the old regime or allow it to continue in which case it will become a relevant property trust. The next 10 year anniversary would be May 2015 but how would the charge be calculated?

Thanks

Karen

[Tax is brill]

Yes, there is a 'window of opportunity' during which the Revenue will allow existing trusts to amend their terms following the changes introduced by Finance Act 2006.

If the trust does not change its terms, then you are right in saying that it will become a relevant property trust which could lead to ten year charges and exit charges under certain circumstances. The ten year charge would be based on the value of the releavnt property at the time the charge is due.

regards

taxisbrill@yahoo.co.uk

[Lee Young]

Care is needed as the rules differ according to whether the trust is that for bereaved minors (ie set up by parents) or trusts for others in which case those more favourable unravelling rules do not all apply.