Scrip dividends, trusts, and inheritance tax
Apologies to the casual reader because this post is fairly technical. It will be interesting to people who advise on trust taxation however and anyone else who has heard of the legal case referred to as Howell v Trippier.
This firm has recently handled a case in which, in the last couple of days, the court has ruled that scrip dividends received by trustees of a discretionary settlement have the nature of income rather than capital and that in the absence of any positive decision by the trustees to accumulate that income and add it to the capital of the trust fund, the income (and the proceeds that represent it) are not subject to inheritance tax.
The case will be reported in due course under the name of Pierce v Wood. However you read about it here first!
No comments yet.