Readers' forum : Large accumulation

In 1990 an offshore discretionary trust was set up by a non-UK domiciliary. The terms are that the trustees are to hold the income on trust to pay or apply it for the maintenance education support or otherwise for the benefit of the beneficiaries in their absolute discretion. The main discretionary beneficiary is the settlor’s daughter who was non-UK domiciled although UK resident for many years. She would be deemed UK domiciled under the proposed changes but nevertheless is assessed on worldwide income. The other discretionary beneficiaries are the daughter’s spouse and her children all of whom are UK resident.

No income has been distributed since 2007-08 and no capital has been distributed since 2000-01. Further there are no immediate plans to make any distributions although undistributed income is approaching £200 000. The accounts show that the income remains undistributed...