Part 2: Liam Payne’s Legacy and why HMRC will not be Happy

As mentioned in our previous blog, Liam Payne’s estate is being left in trust to his young son.

Until he is an adult, his son will have trustees appointed to manage the £24 million fortune that his father left him.

This type of trust is a “bereaved minor” trust and it is designed to protect the inheritance of children who have not yet reached age 18 and at least one of whose parents has died. If the trust fund is invested, the £24 million fortune left by Liam could double by the time his son is 18.

Why won’t HMRC be happy?

A “bereaved minor” trust is exempt from inheritance tax provided:

• the minor, in this case, Liam’s son, inherits the money at 18; and
• if any money is used before they attain the age of 18, the money has to be used for the benefit of the minor.

There are no exit charges or a 10 year anniversary charge with bereaved minor trusts provided the above conditions are satisfied. Other taxes may apply.

How we can help?

If you require further advice on bereaved minor trusts, please contact Isobel at our Eastbourne office on 01323 875030 and at [email protected]