Sorry, that should read HMRC want £50 a month extra tax for several months.
And I meant say decline my inheritance and ask the executor to give it to my wife or sisters. I'd rather not receive anything than hand it over to my TD administrators.

Would my wife be entitled to half of my inheritance in any case?

Welcome to the trust deed forum 14051983.

I'm very sorry to hear that your mum has passed away.

I believe that the executor has a responsibility to ensure that the inheritance is paid out in line with the will or the law (if there is no will). I don't believe that the executor has the freedom to pay the money to another person of your choosing and even if they did I believe your Trustee would be entitled to seek recovery of the funds that you have effectively gifted away. However, these are legal matters so you may wish to take legal advice (which we cannot provide).

On the part of your creditors, they agreed to your trust deed partly on the basis that if you received a windfall that they would receive more than initially expected. A trust deed is only ever intended to write off debts that you cannot afford to pay during its term.

You will not be able to add tax arrears accrued after a trust deed started as a debt in your trust deed, though I appreciate that this will be frustrating if they result from an error elsewhere.

I don't think your trust deed firm is having it both ways in terms of the tax. When you appointed them to handle your trust deed you made them responsible for collecting any windfalls that you receive, and to deal with the debts that existed at the point of time that you signed. They are just acting in accordance with their responsibilities and the agreement that you made with your creditors.

If your expenditure is to increase however (due to repaying the tax) you may be able to arrange a reduction in your monthly contribution to the trust deed if you make your case to your Trustee.

Hi 14051983

In answer to your questions:

1. You can't re assign funds to another person. Unfortunately these funds from the inheritance vest (belong) to your Trustee. Its called Acquirenda which is basically new assets acquired between the start of the Trust deed and before the end. Your wife has no call on the funds. Sorry its all bad news.

2. Trust Deed assistant is correct on point 2.

Sorry it's just been a bad news response all round.

Mark

Thanks for the replies.
It's particularly galling that I have to hand over all my mother's bequest as I only had to take out a Trust Deed as HMRC were chasing me for tax that, eventually, they agreed I wasn't owe them. Up until then I was just managing to get by and would've been able to keep my inheritance.

Is it worth trying to negotiate with my IP, given I only have six more payments to make, about the possibility of me keeping some of it or is it a case of they'll take all of it and I'd face nasty consequences if I don't tell them about it?

Hi there.

Your Trustee became obligated to collect what you can afford to pay towards your debts when you appointed him/her. There is no harm in asking I suppose but their duties are pretty clear.

You are correct that there could be serious consequences if you tried to hide the money from them.

Does the inheritance amount to more than the total owed to your creditors?

I reckon I'd be looking to inherit anywhere between £5000 - £10000
With only six payments of £319 per month left of my TD,it would be a heck of a lot of money to hand over to my IP.

At the start of my Trust Deed, my debt was £19,170 of which I have repaid £13,428 to date with £1908 of payments left to be made by Direct Debit and there will also be approximately £2000 in shares to be added to the total when my trustee cashes them in.

Remember you always owe the full amount of your debts until completion,only then is any written off.

Its all about what you can afford to repay.

Paul

It does look likely that everything will need to be paid over 14051983.

In addition to the debts themselves there are the fees and costs of the trust deed firm to consider (and interest on the debts if the lump sum were sufficiently high as well).

Sorry that it isn't better news.

Oh well, thanks anyway.
From being a good thing, it's become one of the worst decisions I've made and an insult to my mother's memory.
In hindsight,I wish I'd never taken it out in the first place and just carried on struggling.

I'm sorry to hear that you feel that way 14051983.

However, I'm glad that you're approaching the end of your trust deed and can soon make a fresh start from there.

Best wishes with everything.

Its only been a bad decision because of the inheritance,is there a reason that given your Mum knew about the TD you didnt ask her to change her will?

Sorry for your loss.

Paul

Hi, plasticdaft.
I did ask my mum to change it and give it to my sisters or my wife but with her illness she was unable to get to the solicitor to do so and, for whatever reason, didn't ask him to visit her at home.

I'll just have to grin and bear it, I suppose.

I think thats all you can realistically do,the money is going to give a better return for creditors which is always the main driving point of a trust deed.

Good luck for the future.

Paul

Hi

sorry it is all bad news, but you will have to give the funds to your Trustee, and pay HMRC. I can see why you are annoyed, but the Trust Deed is set up for the benefit of creditors. Thankfully you will be finished soon, and be debt free in the process.... it is not all bad.