Trusts

What Trust's Can Do...

Trusts can be effective in Inheritance Tax planning as they can enable you to give away assets now, without physically handing them over to the chosen beneficiaries.

There are various types of trusts available. The most suitable type for you will be dependant upon your personal circumstances and what you wish to achieve. An example of how trusts can be used in Inheritance Tax planning and their key features include:

Discounted Gift Trust
Depending upon the type of Trust used, the gift is either treated as a chargeable transfer or a Potentially Exempt Transfer and therefore exempt from Inheritance Tax if the donor survives for 7 years after making the gift.

Loan Trust
This type of trust enables you to retain a high degree of control over who will finally benefit when you die, and gradually lowers the value of your estate, thus reducing your Inheritance Tax liability.

The Loan Trust ensures that any future growth on your invested capital accrues outside of your estate and therefore passes free of Inheritance Tax to your beneficiaries. Not only does the trust enable you to retain access to the balance of your original investment, you can also receive a regular tax efficient 'income'.

Life Policies written in Trust
Another option is to fund the eventual payment of Inheritance Tax by taking out a suitable life policy written in Trust. This will ensure that cash is available to meet part or even all of the tax liability and avoid the problems associated with raising money at the time of death.

Probate Trust
This enables you to retain control over income and capital for the remainder of your lifetime. On death it passes to nominated beneficiaries in advance of probate assisting in the provision of available monies.

To discuss your personal requirements with an advisor contact us today.

* Tax information given is based on the 2017/2018 tax year, and may be subject to change in the future. Please note, that the passing of assets between spouses does not normally have a liability to inheritance tax.

THE VALUE OF SOME OF YOUR INVESTMENTS ARE NOT GUARANTEED AND CAN GO UP OR DOWN DEPENDING UPON INVESTMENT PERFORMANCE. YOU COULD GET BACK LESS THAN YOU HAVE PAID IN.

 



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