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Mixing an estate distribution with own savings to fund a new trust.
My client is the sole residual beneficiary of his late mother’s estate. Legacies have been paid and there is £208 000 in cash plus a £300 000 house left in the estate. He is considering a deed of variation to redirect £300 000 into a discretionary trust. The client prefers the full value of the house to be transferred into his own name for simplicity so would like £200 000 of the cash from the estate plus £100 000 he could provide from his own savings to fund the trust.
Would this create a stamp duty charge?
I look forward to hearing from readers.
Query 19 106 – Beneficiary.
Reply by JH
It makes sense to keep the residential property outside a trust even if its current value is within the £325 000 inheritance tax nil rate band. This is because capital growth may cause the property...
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