Advancement of capital from an IIP trust?

[dougk]

Our client died 4 April 2005, leaving his half of the house (T-i-C) plus c£380k in cash/PEP's/Isas etc.After some minor bequests, his Will stipulated that his Trustees should pay the income from the rest of his estate to his widow for the rest of her life, and after her death the remainder of his estate to go to a number of charities. [The couple were childless, and her Will also provides for the bulk of her estate to go to charities following her death.]
His widow will also receive a lifetime pension that is sufficiently large to bring her well into the higher-rate tax bracket, so that any income she receives from the trust (deemed to be an IIP trust) will also be subject to higher-rate tax.
Although advancement of capital from an IIP trust would normally be regarded as a breach of trust, we have suggested to the trustees that they approach the "remaindermen" to see whether they would agree to having the bulk of the free capital invested in non-income producing assets, such as investment bonds and low- or nil-yielding "fund of funds" unit trusts, with a view to advancing half of the total net return to the life tenant each year, and retaining half for the remaindermen.Because of the tax saving, this arrangement should provide a higher net reurn to both the life tenant and improve the growth for the remaindermen.
Our understanding is that, provided all of the remaindermen agree to such an arrangement, and that the Trustee Act 2000 is otherwise fully abided by, this arrangement should be acceptable.
However, although 5 of the 6 charities have accepted our suggestion in principle, the solicitors for one of them has recommended a refusal on the grounds that such an arrangement would not be legal. Are they right?

[Peter D]

As the ladies Will also leaves monies to the charities I would suggest reminding the 6th solicitor that her Will can easily changed and the charity excluded. I am surpised that 5 have accepted the change whilst only one thinks it is not legal. I am sure that the deceased gentleman would want the best for his wife and the charity issue should be second. This is a complex area of Trusts and Variations and will need specials knowledge to over ride the 6th solicitor. Regards Peter