I am a trustee of a long-standing discretionary trust. Its accumulation period ended some time ago, meaning all income should now be distributed. But it still has Undistributed Income, and its investments continue to produce income. Unhelpfully, despite being regularly asked, none of the surviving beneficiaries want any income at present, but may in the future I suppose.
So my question is: What are we supposed to do with the income if we can’t give it away?!
Is our only option to appoint new beneficiaries (which the trust deed allows), who are in greater need than those currently named?
Additionally, there is a 10 year IHT charge coming up. Am I right in thinking that this charge has to be paid out of capital - hence, there would be no point in retaining income to cover it?