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Discretionary trusts – beneficiaries’ entitlement to information

Trusts and Estates

Discretionary trusts – beneficiaries’ entitlement to information

The discretionary Will trust can offer IHT planning advantages. Under s144 IHT Act 1984, a distribution made by the trustees within two years of the testator’s death can be treated for Inheritance Tax (IHT) purposes if made by the Will. This can effectively provide the IHT (but not the Capital Gains Tax (CGT)) advantages of an agreed variation under s142 IHT Act 1984, without the requirement to obtain the agreement of beneficiaries who may be unable to give consent, by reason of age or disability, or who are difficult to contact. However quite apart from the possible IHT advantages, discretionary trusts may be appropriate in other cases, where family members have fallen out. A fruitful area of conflict can be the information that should be supplied to disappointed potential beneficiaries, as illustrated in Blades v Isaac and Another [2016] EWHC 601 (Ch).

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