Winding up a Discretionary Trust

[andyk74]

Hi, please can someone tell me what the procedure is for winding up a discretionary trust? It has not yet come to the end of the trust period, however the trustees and beneficiaries are in agreement - however a few beneficiaries are minors.

Any advice would be welcome

Many thanks

Andy

[Anthony Nixon]

Ideally you need someone with both legal and tax expertise to do this.

There are odd wrinkles in the law and the tax rules which can make particular ways of going about things differently have more or less desirable results.

The big factor is CGT. At the point any beneficiary receives the right to get something from the trust (which will usually mean the trustees signing a formal deed to exercise their discretion under the trust) the trustees become liable to CGT as if they were disposing of the trust assets.

CGT holdover relief will usually be available, but there may also be an exemption available to the trustees.

Get advice on the specific circumstances of your trust.

Anthony Nixon CTA TEP Solicitor
Partner, Thomas Eggar LLP, Southampton and Chichester
anthony.nixon@thomaseggar.com
023 8083 1224