Trusts & Tax

Trusts

We are experienced at creating trusts (often called settlements) and administering trusts.

Many trusts are created by will. They can also be created by deed. Trusts are generally used as a means of controlling property and protecting a family's assets. They are often useful in the context of tax planning. A trust is a separate entity for tax purposes.

The trustees are normally between two and four individuals. The trustees are legally bound to administer the trust property in accordance with the trust instrument. The trust instrument is either a will or a deed and defines who may benefit from the trust property. The trust instrument may impose restrictions on what the trustees may do and the general law prescribes the duties trustees must comply with in order to protect the interests of the beneficiaries.

Trusts can provide a much more comprehensive and effective protection of an elderly person's assets than using powers of attorney.

Trusts can have a number of uses, such as:

  • to protect the property of vulnerable, ill or elderly people;
  • to provide protection from payment of care home fees (usually will trusts);
  • to provide a safe means of looking after property in case of accident or illness causing incapacity (often preferable to relying on an attorney or deputy).
  • to protect the inheritances of children and young people;
  • to save inheritance tax
  • to preserve inheritances of children while providing for a second husband, wife or partner.

We have many years experience of creating and managing trusts. We help trustees to manage their funds effectively and are proactive in advising trustees on legal and tax issues. We also act as trustees for our clients.

Tax

The transfer of property will usually involve tax implications. We are able to advise you on the legal and technical aspects of transferring property and prepare the necessary documentation. We can also advise you on the capital tax effects.

On a gift of land, inheritance tax and capital gains tax must all be considered and we will help you structure the gift in the most tax efficient way and take care to explain the options open to you. We will advise about rights for services, access etc, boundaries and covenants and deal with registration at H M Land Registry. 

We are experienced at working with accountants to achieve the best all round solution to transfers of family farms and property transfers down the generations. When helping our clients to administer estates and trusts, we will advise you about any tax saving opportunities.

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