Tax on trust fund, quick question on liability.

I know nothing on trust funds, but if it's been through probate, then surely it's been swept up in inheritance tax calculations?
 
Squid said:
Did the fund carry on being active over last 5 years ? Ie invested by the fund manager etc.
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Yes. We are trying to investigate the status of this, we suspect it has not been managed very well.

The reason I am not sure it went through probate is that it would be the property of the Trustees, not my Father. There would be a tax liability on us and I am not sure how this works over that time span.
 
A lot depends on the type of trust and you haven't given that detail. There are a variety of taxes that could be due, particularly if probate wasn't done right.

The tax due depends on the type of trust. Brief guide to the types of trust at https://www.gov.uk/trusts-taxes/types-of-trust

You can't really get an answer without knowing what type of trust it was and how it was dealt with when your dad died.
 
The trust is a Scottish Widows flexible options bond. It was taken out on 2005 and he died in 2009. The fund was set up to take a sum out of the estate and depending on how long he lived, a portion of it is tax exempt. The fund was effectively the asset of the trustees (we three) and he received income directly from the fund.

However I think we will see what SW comes up with and go from there. Thanks to all who replied.
 
Sounds like a discounted gift trust arrangement. i.e upon investment, he received a notional discount against his future IHT bill, the money was invested and he received an income for the remainder of his life time. If he survived 7 years the whole discount was taken into account for IHT, if not, then some of the discount was brought back into his estate for IHT purposes

http://www.scottishwidows.co.uk/extranet/products/trusts/discounted-gift-income-discretionary
 
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