Commentary

I12.1123 Trusts for minor children and young persons

IHT, trusts and estates

I12.1123 Trusts for minor children and young persons

I12.1123 Trusts for minor children and young persons

This is the category of testamentary provision which is most affected by FA 2006. Wills which were made before 22 March 2006 which contain trusts for minor children drafted with the accumulation and maintenance trusts rules in mind will in many cases have different tax consequences from those originally contemplated when the will was made. How different will depend on the terms of the trust and what has happened by the time of the death of the testator. The main possibilities are as follows:

  1.  

    (a)     The existing will contains a simple accumulation and maintenance trust where the beneficiaries are the children of the testator, capital vests in equal or other fixed shares at the age of 18, and Trustee Act 1925 s 31 applies to the income. It will fall within the trust for bereaved minors regime1 (see I5.546–I5.550) and the tax consequences are much as originally contemplated. A codicil or new will is not needed.

  2.  

    (b)     The existing will contains a simple accumulation and maintenance trust where the beneficiaries are the children of the testator, capital vests in equal or other fixed shares at the age of 25, and Trustee Act 1925 s 31 applies to the income. It falls within the age 18-25 trust regime2 (see I5.551–I5.556). The tax consequences are

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial