My client set up a UK discretionary trust on 10 October 2012. They have a property and a small amount of cash in this trust, but the value is under £325,000 and only generating a small amount of income but there is a tax liability. My client is also looking at possibly distributing a share of the property out to a beneficiary.

As the 10-year anniversary date is approaching, would a 10-year charge or exit charge need to be reported as the value of the trust is under the nil rate band?

For a trust to not have to report 10-year charges and exit charges it must have no inheritance tax (IHT) liability and also be classed as an excepted trust.