Just a quick note on dealing with discretionary trusts as part of estates. You may have come across estates where a person leaves assets on discretionary trust. Say, for example, a grandmother leaves assets on discretionary trust for her three grandchildren.

How do you deal with this in the context of the Statement of Affairs? Do you insert each of the grandchildren, as a beneficiary into the form? Is the executor or trustee listed as a beneficiary?

The short answer is no. What is normally done is that you must register the discretionary trust separately through the TR1 procedure. You will need to have PPS numbers for the executor/trustees of the trust and if the executors do not have PPS numbers (as they are outside of Ireland) an application for PPS numbers will have to be made. Once the TR1 is completed, one emails it to businesstaxesregistrations@revenue.ie. One then obtains a separate tax number for the trust. The trust will be registered for income tax.

In the Mandatory Questionnaire section of the SA2, there is a question “Did the deceased create a discretionary trust during their lifetime?” It goes on to ask “Was this under their will?”. You will need to say yes to both questions. When you say yes to both questions, the form prompts you to insert the discretionary trust number. This is the new tax number you have received from Revenue. In time then Revenue will make contact to go through the details of the Discretionary Trust under the will. So there is no listing of a discretionary trust beneficiary on the form under the beneficiary section of the SA2.

Note the Discretionary Trust will be first registered for income tax. You can’t register a discretionary trust for CAT as the DT doesn’t pay any CAT. It is the beneficiaries of the DT that pay the CAT (if the benefits exceed the relevant thresholds) once funds are distributed out to the beneficiaries.

Hope that helps and if you need any assistance on probate, capacity, will draft of tax matters feel free to email me @ckelly@hcalaw.ie