Tax owed on a trust from Inheritance

[Lord Rossmore]

I can briefly sum up the situation:

My grandfather owned large farm. He left his land to his son, my uncle. He left his house also to the same son to 'hold in trust' for my father as right to reside, naming me as the residuary beneficiary. I have no idea why the will was done this way. My grandfather died 20 years ago and my uncle did the probate. My father then continued to live in the house until his death earlier this year. I have spoken to the family solicitor and It now transpires there is a lot of tax owed that was never paid on the trust, and the fess and penalties that will probably arise. My uncle, the trustee is also deceased, about ten years and I was never made aware of any of this.
Even if my uncle was negligent, I suppose it doesnt matter as the liability falls on the estate I assume to pay whats owed. Will I be allowed to take ownership of the land now and sell it to pay the taxes ?

 

[Thirsty]

I'm sorry for your loss.

Did your Uncle and / or father have a Will?

 

[Lord Rossmore]

I'm sorry for your loss.

Did your Uncle and / or father have a Will?

Thanks
My uncle left a will but there was no mention of the trust in it, as i have seen it. My father left no will at all, but he had no assets

 

[ClubMan]

Have you had any legal advice on this yet?
If it was me then a good solicitor would be my first port of call.

 

[Thirsty]

My father left no will at all, but he had no assets

IANAL

Trying to get this clear in my head:

1. Grandad John left Farm to Uncle Joe. Nothing to be done here, not the OPs concern.

2. Grandad John left House to Uncle Joe; with a right of residence to Joe's brother Jack (OPs Father), and OP as "residuary beneficiary".

3. Uncle Joe is deceased; he made a will - what does will say? - am guessing it is in relation to farm, as house was already covered under Grandad Johns will. If it wasn't left to the OP, nothing more of concern here.

4. Jack is now also deceased, but did not have a will or any assets.

Question: what does a residuary beneficiary mean under Grandad's will? Was the house the "residue" and therefore OP inherits the house?

 

[Lord Rossmore]

Have you had any legal advice on this yet?
If it was me then a good solicitor would be my first port of call.

Yes my solicitor is looking into it. He did advise that there will probably be the need to engage with a tax expert to calculate whats owed. Which will be costly

 

[Twoflutes]

Is the Trust now de facto wound up as the Trustee is deceased (the uncle), and OP is beneficiary owner. Or does the Trust become part of the uncles estate (but did not make it into uncles will) ?

 

[Thirsty]

Yes my solicitor is looking into it. He did advise that there will probably be the need to engage with a tax expert to calculate whats owed. Which will be costly

Its still not clear to me what you have actually inherited, if anything?

 

[Brendan Burgess]

Trusts are very complicated and you need specialist tax advice. Which is probably from a lawyer specialising in trusts.

But the only asset of this trust was the house which now goes to you? Is that right?

Was it a formal trust?

It's unlikely that anyone could solve this one for you on askaboutmoney. They would need to see all the paperwork - the original will, etc.

Brendan

 

[Lord Rossmore]

But the only asset of this trust was the house which now goes to you? Is that right?

thats correct

 

[Lord Rossmore]

It's unlikely that anyone could solve this one for you on askaboutmoney. They would need to see all the paperwork - the original will, etc.

Brendan

Thats no problem.

Thanks to all for responding to my query

 

[Thirsty]

Again IANAL.

So from what you have said what you have inherited is the house only, not the farm?

And there are taxes to be paid; partly I would think from your father's right of residency (but there is also some agricultural relief thing that I don't pretend to have a handle on).

And then there's also possibly an inheritance tax as you effectively inherited from your grandfather rather than your father.

So your question was "Will I be allowed to take ownership of the land now and sell it to pay the taxes ?" Though I thought you said your inheritance was the house only?

In any event, as part of the administration process, the answer to your question is yes, you can sell house to pay taxes.

But it would well repay getting expert advice on what taxes are due.

Pity Grandad didn't just leave the house to your Dad.

Salutary lesson to anyone writing their will today.

 

[Lord Rossmore]

Again IANAL.

So from what you have said what you have inherited is the house only, not the farm?

Yes the house only

And there are taxes to be paid; partly I would think from your father's right of residency (but there is also some agricultural relief thing that I don't pretend to have a handle on).

And then there's also possibly an inheritance tax as you effectively inherited from your grandfather rather than your father.

So your question was "Will I be allowed to take ownership of the land now and sell it to pay the taxes ?" Though I thought you said your inheritance was the house only?

Yes I guess in general, if the house was in a trust, and actually is still in my grandfathers name, who has the authority to sell it, even to deal with the estates taxes. Now that executor and trsutee is deceased

 

[Thirsty]

Yes I guess in general, if the house was in a trust, and actually is still in my grandfathers name, who has the authority to sell it, even to deal with the estates taxes. Now that executor and trsutee is deceased

I understand the process is called 'Grant of Administration with Will annexed'; and if you are the beneficiary in regards to the house, then I believe you will have the right to extract said grant.