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Can you sell shares held in a trust and close-down the trust?

Shares in Trust predicament - unwind required

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I have a slight predicament that I am looking for advice on how to unwind from:

I have a UK Ltd. company with the following share structure.  Myself 50%, my wife 30%, and my Mother in law 20%.

We were advised upon incorporation that we could extract funds out of the company more efficiently by having my My Mother in-law purchase shares for my daughter (who was 3yrs old at the time of incorporation), and holding the shares in trust, with any benefits being used for her wellbeing / maintenance.  

Whilst we were advised that my Mother in-law should purchase the shares with her own money (which she did do) and in her name, and also that she should write a letter to me expressing that she wishes to purchase the shares in my company for her grandaughter and hold them in trust for her with any benefits going to her grandaughter; we received no advice on whether we needed to formally set-up a trust (with a trust deed), nor whether we needed to open a bank account and if so what type of bank account this should be and who needed to open it to administer the account.  

The predicament: We are now in a predicament (with my first year-end accounts being submitted imminently) where a dividend has been declared for the 20% shareholding, and a tax return has been done for my daughter as 'beneficiary' of the dividend.  Whilst the amount of this initial dividend declared is a sum that we can absolutely use for my daughters 'maintenance' (though this will be drip-fed over a lengthy period), we do not need, nor could we use,  a similar sum year on year; and do not want the dividends to simply accumulate year on year until my daugher is of age where she is then entitled to the amount, as this will be significant!

Further complication: In the absence of any trust deed, and any trust account, and also the fact that the signed letter we were advised that my Mother in-law write to purchase the shares was not witnessed, I do not believe the 'trust' is actually set-up corrctly and therefore stands as a legal entity, even though the intent to hold the shares in trust was always there.

I therefore am now looking to unwind the situation in the cleanest way possible, ensuring that my Mother in-law does not incur any tax liability, that we can utilise the already declared dividend for my daughter (which we can), and that we can sell the shares back to my company.

Advice welcome

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