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TonyTax
TonyTax, Tax Consultant
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Set up a discretionary trust to provide a home for my mentally

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Set up a discretionary trust to provide a home for my mentally ill son.
Settled money in trust. Trust bought flat. Son (age 34) lives in flat. Flat brings in no income.
There is a small residue of cash in trust but this is in a current account which pays no interest. Now I have to fill in the Trust and Estate tax return.

Please, is there anything at all I have to answer Yes to, on the tax return, this year?

Linda
Submitted: 3 years ago.
Category: Tax
Expert:  TonyTax replied 3 years ago.
Hi.

Can you tell me when the trust was set up please.
Customer: replied 3 years ago.

Hello,


 


April 2013. So this is the first return,


 


Linda

Expert:  TonyTax replied 3 years ago.
Thanks.

Leave this with me while I draft my answer. There is a fair amount to get through so please bear with me.
Expert:  TonyTax replied 3 years ago.
Hi again.

Please refer to the notes here and here, the trust tax return SA900 here, the help notes for the SA900 here and the form VPE1 here. Ignore everything in the SA900 but the following:

Q8 - page3

You can tick "No" in boxes 8.1 to 8.13 inclusive. Put a tick in box 8.16. This will make no difference as the trust has no income at present.

If you make a vulnerable beneficiary election which you can do, put a tick in box 8.18 and complete the form VPE1, a link to which you can find above. This will ensure that the high tax rates charged on trust income will not happen if and when the trust has any income.

Q10B - page 6

Tick "Yes".

Q12 - page 6

Put details of the trust settlor (you) in box 12.1.

Tick "Yes". Enter details of the set up of the trust in box 12.2.

Q19 - page 11

Give the trustees details here.

Q20 - page 11

Give details of any changes in the trustees or their details here.

Box 21.11 - page 12

Mention that you are enclosing a vulnerable person election here.

Complete boxes 22.1, 22.2 and 22.3 on page 12.

I hope this helps. Let me know if you have any further questions.
TonyTax and 3 other Tax Specialists are ready to help you
Customer: replied 3 years ago.

Thanks. I can't rate the answer yet as there is too much to take in. But I assure you I will do so. If that needs you to send me another answer then please do so.


 


Thanks again,


Linda

Expert:  TonyTax replied 3 years ago.
The question will stay open so you can ask follow up questions if you need to. You can rate it when you are satisfied.