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An offshore trust has undistributed income and stockpiled gains. If the trustees create a new trust out of the original trust assets, how are the income and gains apportioned?
An offshore trust has about £30 000 of undistributed income and £40 000 of stockpiled gains. If the trustees appoint a new trust fund for one of the beneficiaries leaving the main trust intact but with fewer assets how is the undistributed income and gains allocated between the two trusts?
Am I correct in thinking that the allocation is pro rata to the value of the two trusts? Would both trusts be allocated a proportion of income and gains or could one receive income and the other gains?
Furthermore could the trustees decide to apportion in a different manner? For example if the new trust was for UK-resident beneficiaries but the original trust had non-resident beneficiaries could the stockpiled gains and income remain with the original settlement and not be allocated to the newly created one?
Are any of these suggestions viable and are...
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