Nuts and bolts of winding up a discretionary trust

[AK2021]

What is required in practice to end a trust?

We have a discretionary NRB trust created on the death of my father in 2002. (half share of house)
The four children of the deceased are the trustees, and they and their children are potential beneficiaries.
On the death of mother in 2019 her estate paid off the loan to the trust.
Over the intervening years the trust has paid capital and income to various beneficiaries (with r185/r40 reclaims where appropriate)
All this was initially set up and advised by our solicitor but he retired, so recently run by the trustees with input/paperwork from the accountant.
The trust is registered and has paid 10y charges/IHT/Income tax when required.
The trust now contains c10k. there will be one more payment of income in TY 24/25 to a minor - c6k + r40 reclaim.
The remaining capital will be available to distribute and pay any fees or taxes.

What do we do next?
I assume we will have a final tax return and iht100s etc. (and accountant fees)
How do we know how much capital we can distribute, until we know what fees may be payable afterwards?
I read online we may have to notify HMRC/get clearance?
Does the trust just end when there is no money left?
Do we need a solicitor to write a deed to end the trust?

[AGoodman]

The neatest way is:

- deed of appointment to the relevant beneficiaries absolutely (ideally in shares rather than listing absolute sums). The appointment is subject to the trustees' lien for the costs of the distribution but the trust fund has otherwise come to an end.
- distribute most of trust fund but keep reserve for the following
- calculate final tax, file return, pay tax (file holdover relief claim under s,260 if desirable)
- file IHTc and pay any IHT exit charge
- deregister trust for TRS
- pay final fees/costs
- distribute balance

There is no need for clearance but you have to tell HMRC to get off the trust register and so you can stop filing annual tax returns.

Probably worth enlisting a solicitor, yes.

[AK2021]

Thank you