Funds Insider - Opening the door to funds

Welcome to the Citywire Funds Insider Forums, where members share investment ideas and discuss everything to do with their money.

You'll need to log in or set up an account to start new discussions or reply to existing ones. See you inside!

Notification

Icon
Error

Tax effecient Trust
Uhsa
Posted: 11 March 2011 12:43:45(UTC)
#1

Joined: 20/01/2011(UTC)
Posts: 11

Hi I wish to write a will and I believe by putting my assets into a Trust, I could make it more tax efficient? However I am lost with the sheer number of various forms of Trusts! Can anyone please simplify for me and suggest the most tax efficient version.
CONFFA
Posted: 17 March 2011 12:50:48(UTC)
#2

Joined: 12/10/2010(UTC)
Posts: 5

Just a thought - speak to a solicitor??

In all seriousness, this is probably the best move you can make
Artist39
Posted: 17 March 2011 12:59:38(UTC)
#3

Joined: 17/09/2009(UTC)
Posts: 8

Better still, a good financial advisor. Solicitors (expensive) vary like everyone and you need a recommended one with relevant expertise.
Uhsa
Posted: 17 March 2011 13:05:45(UTC)
#4

Joined: 20/01/2011(UTC)
Posts: 11

thanks
whitegates
Posted: 17 March 2011 14:11:07(UTC)
#5

Joined: 01/02/2010(UTC)
Posts: 5

Uhsa Financial advisers - they always have an axe to grind - usually recommending a solution that pays them the most commission. Seem cheap, but end up much more expensive. Stick with the advice from CONFFA.
Uhsa
Posted: 17 March 2011 14:18:19(UTC)
#6

Joined: 20/01/2011(UTC)
Posts: 11

thanks 'whitegates'
Anonymous Post
Posted: 17 March 2011 14:35:44(UTC)
#7
Anonymous 1 needed this 'Off the Record'

You also need a Chartered Accountant who has experience in establishing discretionary trusts.
T Chand
Posted: 17 March 2011 22:57:23(UTC)
#8

Joined: 27/09/2010(UTC)
Posts: 19

What do you mean by “tax efficient”?
Income tax / Capital gains tax / Inheritance tax ?
Trusts have to pay income tax / Capital gains tax at different rates and different time scales.
By putting your assets in the more common “discretionary Trust” you no longer own them and (you and your spouse) should not benefit from the assets. Your spouse can be a beneficiary after your death.

Thereare other trusts where capital is no longer yours but the interest/income can be yours but you need to be careful not to breach HMRC rules.

First you should make sure that you do not need the capital or income transferred in to the trust for the rest of your life.

Most couples write mirror wills leaving every thing to the surviving spouse. When the surviving spouse dies the assets will be referred to as estate of the deceased and will be assessed for Inheritance tax.
A couple get 2x325000 before Inheritance Tax kicks in at 40%. The rest of the estate will be dispersed as per your will by the executor of the will.

You can only put £330,000 in to a discretionary trust and has to survive 7 years to get IHT relief.

It all depends on your total assets and potential IHT bill; your attitudes to Tax and more important disowning your assets by putting them in a trust.

Advice from specialist solicitor and accountant is expensive but essential as the trust documents have to be worded correctly with legal jargon for the trust to withstand scrutiny by HMRC on your death.
Uhsa
Posted: 18 March 2011 10:16:31(UTC)
#9

Joined: 20/01/2011(UTC)
Posts: 11

That is so very helpful T Chand Really appreciate. Can you recommend a specialist solicitor or accountant ?
Jonathan Hill
Posted: 18 March 2011 11:35:22(UTC)
#10

Joined: 09/03/2011(UTC)
Posts: 7

Most solicitors will offer a free initial interview to see if they can assist. If over 50 you may also qualify for a free solicitor prepared will under some of the charity schemes available. With regard to more specialised advice a member of “STEP” would be a move in the right direction.
2 Pages12Next page
+ Reply to discussion

Markets

Other markets