Can a Trust be a beneficiary?

[marc02]

Can a Trust gift to another trust, or must the assets pass through a real person?

[Lee Young]

Assets can be transferred from one trust to another, though there are often limitations on when and how this can happen in the "donating" trust.

[marc02]

Thanks Lee.

So if a Trust approaching the 10 year charge holds assets and the Trustees want to retain control of those assets, but keeping the assets in Trust will cause a periodic charge, could the Trustees create a new Trust and gift the assets to that new Trust and then the 10 year clock starts again? Also the assets never enter a persons estate and so avoids the IHT issues with a gift. Is this right?

Would there be an entry charge or not? Or is this dependant on whether the transfer / gift to the new trust was within the NRB?

[maths]

Is this right?

No.

An anti-avoidance provision provides that where property is transferred from one relevant property trust to another such trust it is treated as remaining in the former trust ie 10 year charge is not avoided.

[LozaACCS]

I thought I might get much needed CPD from this post, however Maths beat me to it, i was going to quote S81 IHTA 1984 and IHTM 42229.

[maths]

It's a tough world!!

But you should get brownie points for the legislative and HMRC references !!

[marc02]

Thank you, both!

[marc02]

Hi both,

I think my last question on this..., where there is no liability, because the Trust has made no income and only holds assets which are not liable either by exemption or below NRB...., where these asset(s) are gifted to a new Trust I understand from your reply that the tax liability would carry over to the new Trust ie: but what about the period? Eg: if the old Trust had 80 year period and 21 year accumulation period, would the assets gifted into a new Trust, need to be vested by counting 80 years from the date of the settling Trust? Also the accumulation period continue from the date of the settling Trust?

Thanks