University Fees

Question 1

Recommend and justify a suitable trust to be used for uni fees

Answer 1

• discretionary trust
• no IHT on way in
• As below NRBs
• will immediately reduce estate for RNRB purposes
• growth immediately outside estate
• gift less exemptions will be outside the estate in 7 years
• if made in 2018/19 David will have 1 and June 2 gift exemptions
• periodic and exit charges could apply
• but unlikely due to size of the gift
• David and June can be trustees
• unborn grandchildren can also benefit
• beneficiaries have no absolute right to the funds
• meaning the trustees can have more certainty that they are used for desired purpose

Question 2

Duties and responsibilities of trustees

Answer 2

• act in accordance with trust document and general law
• act fairly to all beneficiaries
• take responsible care in making investments
• obtain professional advice when making investment decisions
• invest cash held (which is not to be used for a payment out of the trust) as soon as possible
• not to profit from the trust
• to protect the trust assets
• to keep accounts
• declare and account for any tax owed on trust assets
• act as registered owners of the trust property