Question on 10 year Trust Charge, on a Life Interest Trust

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The Will of my mother left her half of two properties and cash in trust for beneficiaries in order of my dad, myself and my children, on her demise in 2012 within the Nil Rate Band.

A subsequent deed of appointment was made in 2013, to give my father a Life Interest on mum's half share to continue to be able to live in the main house and take income from both properties and cash during his lifetime and then for the trust to distribute those assets to my children.

Following the death of my father, the Will Trust paid it’s share of IHT on Dads Estate as if he had owned the current value of those assets held in trust for my children (as calculated by a solicitor).

Two questions;-
1) As IHT has just been paid on the current value of the assets in trust does this mean that there is no 10 year IHT charge on the trust (where the assets are still held until my children reach 28 and 30years of age)?

2) Is it still a life interest trust (from a HMRC tax form reporting point of view), now that the beneficiaries have now changed from my deceased father to my children until it is distributed to them ?

Thank you for any assistance on this.

[dslippy]

A question for whoever drafted the documents and therefore knows what they say.

[Sam101]

If the Trust assets would not be subject to inheritance tax, I believe that the Trust Registration does not apply.
Presumably you have had a statement of accounts from the solicitors which should show all the assets and costs and how the tax has been calculated. If this is not clear then ask the solicitors for an explanation

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A question for whoever drafted the documents and therefore knows what they say.

I asked a similar question to the solicitors who drafted the Deed of Variation and they said it would cost approx £450 to provide an answer !

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If the Trust assets would not be subject to inheritance tax, I believe that the Trust Registration does not apply.
Presumably you have had a statement of accounts from the solicitors which should show all the assets and costs and how the tax has been calculated. If this is not clear then ask the solicitors for an explanation

Reading around I understand that when a property is left in trust and the remaining spouse continues to live in that property with a life interest in it, IHT is due on that.

An extra complication is that while Dad left his part of both houses to my children too (so mums half via the trust and dads half directly in his will) the Residual benificary is one of his neighbours:- So the solicitor has pro-ratered the IHT due on the life interest part of the Trust between the residual Estate and the Trust itself. I haven't yet had the tax calculation but the solicitor has submitted to HMRC an IHT payment on behalf of the trust which will come out of the cash just released from one of the house sales.

This is the reason for my question that if the Trust has already paid IHT on its assets I am questioning if the 10year IHT tax also applies.

I will ask the solicitor for more information. I think if we were the residual benificaries the solicitor would be more helpful..