trusts

[deeandgee]

if a trustee for money left in trust for a mentaly disabled family member is paying money from the actual capital in a savings accounts as the income ie interest generated from the investment does not cover the amount being paid out, do they have to complete a trust return to the HMRC. we are not talking large amounts here and the payment is to cover his increasing living expenses in addition to those from dss which he receives. any help would be appreciated

[boxtops]

Can I clarify - the trustee is taking money out of capital, to pay the person's living expenses, rather than taking it from the account where the interest is paid into?

[dzug2]

A trustee normally has to do a trust return anyway - unless HMRC have granted a waiver

If they have I don't see this changes things

[deeandgee]

Hi Boxtops. the majority of the money is in a long term bond (which we were advised was the best option in this case) having previously been in a Life assurance policy which as since matured. we basically then put the reminder of the money in a current account for ease of access to cover holidays, additional living expenses etc . The interest from this £12000 is not good so basically payments to the beneficiary of say 3000 pa are being taken from the actual capital. Help this is soo complicated for a releativelt small amount

[vindi48]

The Trust Deed will say, or if properly prepared - should say, whether or not capital can be used for a beneficiary. Trustees directions always come from the Deed. I don't see that using capital changes the need for for a trust return unless a waiver is in place.