Remainderman meaning

The Variation of Trusts Act 1958 (VTA 1958) empowers the court to sanction alterations to a trust’s provisions on behalf of beneficiaries who cannot themselves give consent to the change at all. It is chiefly intended for the familiar circumstance in which the trust instrument contains no explicit authority empowering anyone to modify the settlement under its own terms. Background to the Variation of Trusts Act 1958 The statute traces its origins to the decision in Saunders v Vautier, a leading case. The court there held that, where every beneficiary is an adult with capacity, they may collectively, acting unanimously, revise the trust terms as they choose if they wish to do so. Traditionally, the most typical illustration is a life tenant and a remainderman opting to divide the trust fund between them rather than maintain the settlement until the life tenant’s death. In practice, in the majority of trusts, however, the beneficiaries are unable to alter the provisions in this manner because they are not all adults...

Private Client England & Wales glossary A Abatement When, after settling the deceased’s funeral costs, debts and liabilities, the remaining estate cannot satisfy all legacies in full, the gifts are reduced accordingly, unless the Will shows a different intention. In a solvent estate, the order for reduction appears in Part II of Schedule 1 to the Administration of Estates Act 1925. Refer to Practice Note: Payment of legacies. Accruals basis Where income is taxed on an accruals basis, it is attributed to a given tax year by reference to the number of days within that year during which the activity giving rise to the liability accrued. See Practice Note: What is the basis of income tax?. Accumulation and maintenance (A&M) trust A form of non‑interest in possession trust designed to benefit children and young people up to 25, which received favourable inheritance tax treatment between 1975 and 2006. See Practice Note: Accumulation and maintenance trusts—IHT [Archived]. Accredited Legal Representative (ALR) ...

This Deed of Partition is dated [ date ] Parties 1 [ life tenant ] of [ address ] (the Life Tenant ) 2 [ remainderman ] of [ address ] (the Remainderman ) and 3 [ trustee ] of [ address ] and [ trustee ] of [ address ] (the Trustees ) Background (A) This Deed is supplemental to a trust dated [ date ] and made between [ parties ] (the Trust ). (B) Under the Trust [ and in the events that have occurred ] the Trustees hold the Trust Fund on trust to pay its income to the Life Tenant during their lifetime and, subject to that, on trust as to both capital and income for the Remainderman absolutely. (C) The Trust Fund comprises the investments and capital cash described in Part A of the Schedule...

Acquisition or appropriation of remainderman's interest Under a life interest trust, the life tenant is entitled to live in the property or take the income it produces. The scenario assumes the life tenant might acquire the remainderman’s interest in the property, thereby converting their position into an absolute interest. In such a case, the remainderman would receive cash in exchange for their reversionary interest. Where the Will trust does not confer an express power on trustees to reallocate or modify beneficial interests, the life tenant and the remainderman may agree a variation pursuant to the rule in Saunders v Vautier, so long as they are both of full age and have capacity. This route is unavailable if any minors or unborn persons have, or may have, an interest under the trust. If there are potential beneficiaries of that kind, an application can be made to the court to approve the arrangement under the Variation of Trusts Act 1958. For further guidance, see: Termination of trusts—overview...

Where a surviving spouse holds an immediate post-death interest (IPDI) in a qualifying residential interest (see section 8H, Inheritance Tax Act 1984), their residence nil rate band (RNRB) can be increased by the transferable residence nil rate band (TRNRB) of the predeceasing spouse, provided a claim is made in such circumstances as appropriate...

It has been assumed that: A’s entitlement under the trust to a 50% interest in the property constitutes a qualifying interest in possession (QIIP) A’s trust interest is not within section 5(1B) of the Inheritance Tax Act 1984 (IHTA 1984) Releasing A’s interest in possession will bring the trust to an end B is not a settlor of the trust The cessation of the QIIP, together with A’s gift of the remaining 50% share, each amounts to a potentially exempt transfer (PET) by A. These transfers become chargeable to IHT if A were to die within seven years. See Practice Note: Qualifying interest in possession trusts—IHT treatment, especially the section ‘Ending of an interest in possession during beneficiary’s lifetime’. Taper relief, as well as A’s available nil rate band, may operate to lessen any IHT payable...