Question:
I am a trustee of my mother's discretionary will trust (DWT) and have made the decision to gift £10,000 to each of four grandchildren from the trust. Is it correct to say there are no or little inheritance tax implications for the trust?
Arthur Weller replies:
What you have written is essentially correct. Where a DWT is created at death in order to utilise but not exceed the then nil rate threshold, a distribution within the first ten years will not attract any inheritance tax. Furthermore, distributions made after 3 months after death, but within 2 years of death, are regarded as being made by the will.
