Trust and Inheritance Tax Planning

Inheritance Tax Planning – A wealth of experience at your disposal

Wellden Turnbull provide a wide range of specialist advice and services on all tax exemptions and limits relating to inheritance tax planning. We have the expertise in place to ensure we fulfill your needs, however complex or specific.

When it comes to tax planning, inheritance tax can prove costly for many families. We also know that smart financial planning and knowing which investment opportunities are available can keep tax obligations associated with inheritance to a minimum. In some instances we will have helped beneficiaries avoid inheritance tax liabilities altogether.

There are many factors that affect inheritance tax obligations, such as the size of your estate, available income and the nature of assets held, so receiving advice that is specific to your circumstances is important.

Trusts are also a great way of managing assets and there are many types of trusts to choose from.

There are different types of trusts and they are taxed differently. It’s important to understand which one is right for you. To make sure you are making the most out of your wealth we will assess if trusts are an option, identify which assets apply and advise on suitable trust types. We will also advise on how to ‘will’ trusts and the effects of trusts on inheritance and Capital Gains tax.

We can also help by:

  • Setting up a trust – including liaising with legal advisors
  • Providing a trust tax compliance service – including HMRC correspondence and returns
  • Advising trust transfers – drafting hold-over relief documents etc.
  • Developing tax strategies – using trusts as asset protection structures
  • Advising on private investments and pensions accounting – including the suitability of conduit trusts
  • Supporting vulnerable beneficiaries – in all their trust dealings.

Trusts can be beneficial if you are a business owner too. This is particularly true if you are looking to pass on your business to your children or employees as part of your long-term tax plan. We will consider trusts in your tax planning for company shares and business assets. Furthermore we will provide advice on how trusts can enable employees to get involved in company ownership schemes.

Frequently Asked Questions

What is meant by a ‘trust’?

In simple terms, a trust is a legal arrangement in which another individual looks after your cash, property or investments to benefit a third party. For example, many parents typically set up trusts with a financial expert on behalf of their children.

Does the cash, property or investments made into a trust count towards inheritance tax?

No, not usually. When you make the decision to put money or property into a trust, you are effectively handing responsibility to the trustee you’re leaving it to. In other words, the trustee you leave your cash, investments or property to will technically own the assets in the trust and will have a legal duty to look after them. As such, it may not count to your inheritance tax, but it typically depends on the exact terms involved.

How can I reduce the amount of inheritance tax I have to pay?

Reducing the amount of Inheritance Tax on an estate can be a fairly complicated and arduous task. However, by leaving your estate to a spouse, paying into a pension account, giving away up to £3000 a year in gifts, or leaving a legacy to charity, you can usually reduce the total inheritance tax you’ll need to pay.

What types of trust are there?

There are a fair few types of trusts to choose from and deciding which one is best for you will very much depend on your exact circumstances. To understand what the difference between a bare trust, discretionary trust, non-resident trust and a discretionary trust is, please feel free to contact our team. We’ll be able to point you in the right direction.