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Who’s the settlor for income tax purposes on distribution of an estate?
Father died in August 2014 with all assets passing to his daughter who herself died in December 2014. In her will she left all her estate on discretionary trust for her two children who are over 18.
In August 2016 (and thus within the requisite two-year period) the personal representatives of the first and second estates (who are the same) together with the children as the beneficiaries of the second estate entered into a deed of variation. This redirected the assets of the father’s estate into a discretionary trust of which they are also beneficiaries.
My thoughts are that for inheritance tax and capital gains tax purposes the father is the settlor. However for income tax purposes it will be the two children even though they would have inherited only through the discretionary trust under their mother’s will which is my main...
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