To claim your CPD certificate, test your knowledge with the questions below.
Write down your answers to each of the following questions and check your answers when you click to claim your CPD certificate on the link below.
A. Anne’s husband Terry died recently and in his Will left her a life interest in his entire estate. On Anne’s death the trust fund will be split equally between his 2 children from a previous marriage, Bob and Geoff. Which if the following is false?
1. Anne is entitled to all of the income generated by the trust fund
2. Anne is entitled to all of the capital of the trust fund
3. Anne is the “life tenant”
4. Bob and Geoff are “remaindermen”
B. Gillian dies intestate leaving no spouse or civil partner but has one daughter, Lisa, who is aged 10. They live in London. Which of the following statements is true?
1. A bare trust is created and Lisa will receive the inheritance when she reaches age 18
2. A bereaved minor’s trust is created and Lisa will receive the inheritance when she reaches age 18
3. An 18-25 trust is created and Lisa will receive the inheritance between 18 and 25 decided upon by the trustees
C. Angus dies leaving a will which splits his estate equally between his two adult sons, Alasdair and Murdo. There are no conditions attached to these legacies. Alasdair is wealthy and has an inheritance tax liability so seeks advice from a solicitor to vary his share into a discretionary trust created by a Deed of Variation (DOV). Alasdair and his wife will be potential beneficiaries of the trust. Which of the following statements is false?
1. Alasdair is the settlor of the discretionary trust
2. Angus is the deemed settlor of the discretionary trust for IHT purposes
3. Angus’s estate will be taxed on any trust income arising from the trust
4. Alasdair will be taxed on any income arising from the trust but can reclaim this from the trustees
D. Trustees of a discretionary will trust receive dividend income of £10,000 in the 2024/25 tax year. They decide to accumulate the income rather than distribute to one of the discretionary beneficiaries. The testator hadn’t created any other trusts either while they were alive or in their will. How much tax will the trustees pay on this income via self-assessment for the 2024/25 tax year?
1. £4,500
2. £3,935
3. £4,275
4. £3,738.25
