Discretionary Trusts again

Currently, there are 0 users and 1 guest visiting this topic.
Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
    Posts
  • #46483
    mika
    Participant

    I need very simple clarification about Discretionary Trusts as I've loooked at so many bits of information that I don't know whether I'm coming or going!

    I have a claimant over 60, beneficiary of a discretionary trust (when he dies any residue interest is to be split between 7 charities – does this make him a sole beneficiary or one of a group and does this make any difference?). The terms of the will gave him an 20% of his shares as capital and the remaining 80% held in trust with the trustees paying him the income thereof during his life (on his death, treated as above) and gave the trustees the power in their absolute discretion to apply the whole or any part of the capital sum for claimant's maintenance, advancement or general benefit.

    Is this considered a discretionary trust and is the capital value disregarded? If so under what Regulation or schedule. If the capital is disregarded, what happens to any income from the investments in the trust paid to him? If he requests and is granted a capital sum for a specific item such as holiday, private medical treatment or to clear overdraft/debt, how is this treated?

    Sorry to ask such basic information but I have really lost the plot on this case.

    #131177
    trace2.0
    Participant

    HB60+ SCH 5 PARA 12

    Payments from a Discretionary Trust are disregarded for Pension age claims and there’s a £20 disregard if payments are for food etc.

    There is some caselaw on ‘sham trusts’ if you can show the beneficiary has been making the decisions regarding the withdrawal of assets and not the trustees. You may find this helpful.

    #131178
    trace2.0
    Participant

    HB60+ SCH 5 PARA 12

    Payments from a Discretionary Trust are disregarded for Pension age claims and there’s a £20 disregard if payments are for food etc.

    There is some caselaw on ‘sham trusts’ if you can show the beneficiary has been making the decisions regarding the withdrawal of assets and not the trustees. You may find this helpful.

Viewing 3 posts - 1 through 3 (of 3 total)
  • You must be logged in to reply to this topic.