Hello, I'm Keith and happy to help you with your question.
I approach this question with a degree of trepidation! Assuming that the trust was set up over seven years ago and no additional funds paid in then the 7 year rule for Potentially Exempt Transfers (PETs) has run out and the moneys put into trust can no longer be brought back into the plan holder's estate for Inheritance Tax purposes. That is the danger with PETs. PETs reduce on a taper over 7 years before they are extinguished.
Whether the trust can be wound up as suggested largely depends upon the wording in the construction of the trust deed, and that is a matter more suited to a solicitor rather than an accountant. Unfortunately, I was unable to transfer this question to the Legal category, nor do I have any of the data needed to even hazard an opinion of whether the trust can be changed or even terminated in this manner.
I do hope I have thrown some light on your problem.