Postby AGoodman » Mon Apr 03, 2017 10:57 am
To answer the original question, there are two issues:
(a) yes, it is arguable that it is benefitting you but I think here the better argument is that the child's money is being used to benefit the child. As pawncob states, it is very unlikely to ever be an issue so I would not worry. (it is a much bigger issue when the parents establish the trust, excluding themselves from benefit and then use the monies to pay the school fees they are contractually obliged to pay).
(b) from a trust perspective, you should ensure that the trust deed includes self dealing provisions (which are fairly standard in most precedents) so that you are not in breach of trust when exercising powers in a manner by which you also benefit.
To answer devon's question, the grandparents' gift into bare trust would be a PET at the date of the original trust so yes, it would remain part of their estate for 7 years. Better that than they hold onto the funds and make annual payments, starting a new 7 year period for each payment.
AG