How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask bigduckontax Your Own Question
bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4204
Experience:  FCCA FCMA CGMA ACIS
75394688
Type Your Tax Question Here...
bigduckontax is online now

I am about to receive a trust fund,it was taken out by my mother

Customer Question

I am about to receive a trust fund,it was taken out by my mother 9 years ago. She is still alive but wants to give us it now as she finds it too stressful.i need some clarification on what tax it may incur as the ifa my mother is using tells me I won't incur capital gains tax
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and happy to help you with your question.
The Trustees are responsible for clearing any tax debts due by the Trust before distribution. This distribution constitutes a gift from your Mother.
Gifts create a Potentially Exempt Transfer (PET) in his Inheritance Tax (IGT) affairs. PETs run off over seven years at a taper and in the event of decease within this period are added back to the estate for IHT purposes. PETs are the first to suffer tax and if the estate is insufficient to met the liability it cascades down to the beneficiary for immediate payment. The classic defence against PETs is a reducing term life insurance policy. Of course, your Mother's age may make premiums prohibitive.
The UK has no Gifts Tax regime so no tax is due on the gift, save for the PET danger. Thank your lucky stars you don't live in France where Gifts Tax kicks in at 5K Euros!
I do hope you find my reply of assistance.
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 1 year ago.
Thank you for your support.