Periodic charges

A discretionary trust was set up in 1999 but the transfer into trust exceeded the nil-rate band at the time so inheritance tax was paid.

Ten years later the previous tax adviser commenced correspondence with the trustees to determine the amount of the periodic charge payable.

Taking the value of the assets held at the ten-year anniversary this was lower than the value of the funds transferred in but still above the nil-rate band that applied at that time of £315 000.

However nothing further seems to have happened. My client believes that this is because the assets were worth less than the value they were when transferred in.

Reading the guidance available it would appear that this is not the case and that there should be a periodic charge based on the value of the assets on the day immediately before the ten-year...