The relationship of a trustee to a beneficiary is a special one and trustees will want to make sure they always get it right. We can make sure that the trustees get their tax obligations right by:
- Helping the trustees understand their UK income/ capital gains tax liabilities, and how to plan appropriately to mitigate them.
- Preparation and submission of UK self assessment tax returns.
- Helping trustees understand their UK inheritance tax liabilities, and strategies to mitigate them.
- Preparation and submission of UK inheritance tax returns.
- Helping trustees understand how to structure their investments in a tax efficient way – such as offshore trustees wanting to buy UK property or UK trustees wanting to invest for gains rather than income.
The UK has a vast array of anti-avoidance legislation that applies to settlors – in connection with both onshore and offshore trusts. Income and gains of some trusts can still be attributed back to (and taxed on) the settlor and it will be crucial for the settlor to understand these potential liabilities. That said, trusts can still be a vital part of an individual’s estate planning, to protect assets, to hand money down through the generations, or to look after a vulnerable relative.
We can help by:
- Helping potential settlors look at their estates and identify the potential inheritance tax liability should they die and look at whether this could and should be mitigated by creating appropriate trusts in their lifetime, or by other means such as inheritance tax friendly investments.
- Helping individuals with their Will planning, to ensure their Wills are drafted in a tax efficient manner and that their wishes will be adhered to, such as by the creation of a family trust on death to look after family assets going forward.
- Helping settlors understand what they can achieve from the use of a trust, whether this should be onshore or offshore, what level of control they could/ should still have and the tax pro’s and con’s of them still being able to benefit.
If you’re a trust beneficiary then you will want to feel that the trust is both achieving its objectives as well as sometimes helping you achieve yours – though of course these two things do not always go together!
We can help by:
- Working with beneficiaries to understand whether they will have a tax liability on distributions from a trust and if so how this might be mitigated.
- Working with both beneficiaries and trustees to plan trust distributions, or whether it is tax efficient for trusts to buy assets for use by beneficiaries.
- Helping beneficiaries understand their entitlements under the trust, and the function that the trust is performing for the wider family.
- Helping beneficiaries understand whether the trust continues to be useful on a cost benefit analysis and, if not, whether there is scope for it to be distributed out instead.