I'm at my wits end at the moment. Feel physically sick.
I have name changed for this but basically a few years ago my partner died at work while we had a very young child. Because we weren't a married couple a lump sum from his pension scheme was put into trust for our child. Myself and other family members are trustees but looking back we didn't really appreciate the level of responsibilty etc we were still in a lot of shock and grief for a good couple of years.
This is where it gets complicated...so his pension scheme employed a solicitor to draft a declaration of trust and that took a while as there was a few errors,mixing up surnames and addresses of parties involved but it did come witha set of explanatory notes (which I have only just recently revisited due to them being sent with the draft that was incorrect all those years ago)stating the trust will pay income tax of trust rate 50% at the time. ( I now know this isn't entirely accurate as the first £200 of income is still taxable at the standard band,it is apparently income after the first 200 to be taxed higher rate.)
This is where it gets really complicated. So apparently it is only taxable at trust rate if the settlor has set up more trust funds. As it was a pension sheme that set this one up, I imagine yes they have set up more trusts. However, does it refer to more than one trust using the same settlement i.e partners death in service paymenet, in which case this trust is the only one. Or does it mean that the 'settlor' /pension sheme in general has set up trusts over the years so they all pay trust tax regardless of what 'pot' the money came from?
A couple of years ago I got the original solicitors whos firm set up the trust document to file a return for me as I was getting confused and even they ammended the return saying it should be classed as standard rate band. Since I found that draft document notes though I've been getting so stressed again that I've been doing returns wrong and I feel like I did the right thing going back to the original solicitors but even they dont seem concrete.
I am so sorry if you have even made it this far reading this. We are not talking vast amounts of income,it is interest of a couple hundred pounds a year from the account the lump sum was put in and I just want to do the right thing. I payed for the solicitor myself before as the fee was more than the income on the trust,I just didn't want to be making mistakes but I realise I'm not cut out for this.