Trusts
Trusts can be a useful tax planning tool to enable you to transfer assets to your beneficiaries without an immediate tax liability but they are fair more than just a tax planning tool. They are also not just for the very wealthy
Trusts can amongst other things be used to safe guard vulnerable beneficiaries, to ringfence money for future care needs and provide for grandchildren’s education or future. They can of course be used to reduce your estate’s exposure to inheritance tax.
At Albert Goodman we can advise on the best trust set up to meet your aims and we can also help you manage the trust assets and compliance matters such as filing tax returns.
We are happy to act as a trustee for your trust to give an independent view on the management of the trust and distribution policies.
The Financial Conduct Authority does not regulate Trusts, Tax and Estate Planning.
FAQ’s
When is inheritance tax payable?
Inheritance Tax (IHT) needs to be paid within six months of death. HMRC will charge interest on the outstanding amount if IHT has not been paid. It is possible to pay the tax on assets, such as property, over a ten year period but interest will continue to be charged on the outstanding amount.
How does Inheritance tax interact with Capital Gains Tax?
The executor is responsible for settling any Capital Gains Tax liabilities, prior to monies being distributed to beneficiaries. This means beneficiaries are not liable for Capital Gains Tax, as this is already settled prior to them receiving their share of the inheritance.
Why is estate planning important?
Estate planning is important for a number of reasons, including minimising the amount of Inheritance Tax (IHT) the beneficiaries may have to pay. Additionally, estate planning prior to death ensures nothing is left to chance, or for the courts to decide, allowing for a quicker transfer of your assets when you die.
Why should I set up a trust?
Trusts are a useful way to mitigate tax liabilities and protect assets. Instead of giving assets or funds to a beneficiary outright, it can be better to place them into a Trust, in case of a change in circumstances for the beneficiary. For example, should the beneficiary become divorced or bankrupt, the funds do not automatically form part of their estate.