There are different types of trusts and they are taxed differently. In a trust, assets are held and managed by one person or people the trustee to benefit another person or people the beneficiary. The person providing the assets is called the settlor. If the trustees change, the trust can still continue, but there must always be at least one trustee. There might be more than one beneficiary, like a whole family or defined group of people.
They may benefit from:. You can find a solicitor to help you set up a trust. You should have at least two trustees but can choose up to four. There are many different types of trust that can be set up depending on how you want to control your assets.
Assets in a bare trust are held in the name of a trustee. This means the assets set aside by the settlor will always go directly to the beneficiary. Bare trusts are often used to pass assets on to young people — the trustees look after them until the beneficiary is old enough.
The beneficiary can get income from the trust straight away but cannot control the assets that provide the income. The beneficiary has to pay income tax on the money they receive. The trustees have complete control over the assets and the income they generate, deciding how and when to give them to the beneficiaries.
This combines elements from different trusts. For example, it might give the beneficiary a right to the income called an interest in possession of half of a trust fund. The Trustees shall pay such amounts of income and capital to one or more Beneficiaries from time to time as they shall in their absolute discretion see fit.
The Trustees may at their absolute discretion:. Provided always that any distribution from the Trust will be made only after the Beneficiary due to receive the distribution has confirmed in writing that he is not under attack from creditors and nor does he have any unsettled claims or pending claims from any court and nor is he an undischarged bankrupt nor is he undergoing bankruptcy proceedings and that no distribution of capital or income may be made to an Excluded Person.
The Trustees shall have absolute discretion over which manner to choose and either manner shall be a valid discharge of their powers. NOTICES Any notice served under this Trust Deed shall be made in writing and shall be considered served if it is handed to the other Party in person or delivered to their last known address or any other such address as the Party being served may have notified as his address for service. They may complete the Trust and Estate Tax Return and account for any basic rate tax due on income.
It is up to the trustees to establish whether a trust is bare. In other circumstances the trustees will need to consider carefully the terms of the trust that they are administering. Does the trust. Mrs A left the residue of her estate to such of her grandchildren as were alive at the date of her death. She directed that the funds should not be paid to the grandchildren until they respectively attain age 21 years. All of the grandchildren who were alive when Mrs A died are entitled to an equal share in the residue of the estate.
There are no other conditions that they must fulfil before they become entitled. The direction about payment does not affect this basic position. The beneficiaries have a vested interest and the trust is a bare trust. The terms of the appointment from the pension scheme were in favour of the child absolutely.
This is a bare trust. Here there are two conditions to be met before the grandchildren become entitled to their shares in the estate Here the grandchildren did not take immediate vested interests at the death of the testator.
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