Trusts & Tax Planning



Tel: 08444 933699


  • Bare Trusts.

  • Life Interest Trusts.


Please Contact Us if our Trusts Team can help you in setting up a trust fund.


The advent of the Finance Act 2006 (FA) has dramatically altered the framework of the taxation of trusts, as the creation of lifetime trusts now incurs a 20% Inheritance Tax (IHT) liability known as an ‘entry charge’, as well as 10 year anniversary charges, unless any relevant reliefs or exemptions are applied. Furthermore, unaltered Accumulation and Maintenance trusts are now regarded as Discretionary trusts for IHT under the FA.

Nevertheless, trusts are still an effective tax planning mechanism. For example, in the event that you survive 7 years after placing property within a trust, the asset will not form part of your ‘Nil-Rate band’ for IHT purposes. Furthermore, some business assets can be transferred into a trust with no IHT liability, as can income out of expenditure that does not lower your standard of living.


A Trust exists when:

  • You give assets to law to people you choose (the Trustees) subject to a duty to hold for the benefit of others (the Beneficiaries).

  • You can set up a Trust in your lifetime or in your Will.

  • However, when you set up your Trust, the Trustees have to manage the assets for the benefit of the Beneficiaries according to the terms of the Will or Trust Deed.

As well as advising on the details of setting up a Trust Fund, we also provide a service supporting Trustees with the ongoing administration of Trusts:

  • We provide a safe pair of hands to numerous Trusts, several of which have assets in excess of £1 million, and to several charities.

  • We assist trustees in setting up Trust Accounts and Trust Tax Returns.


There are many types of Trust Funds designed for specific situations, but common types are:

Bare Trusts

Often used for Trustees to hold assets for a child until they reach adulthood.

Life Interest Trusts

Also known as Interest in Possession Trusts – allowing a “Life Tenant” to receive income only whilst capital is preserved for others after the death of the Life Tenant. If set up in a Will, these are referred to as Immediate Post Death Interest Trusts (IPDIs).

You can use a Life Interest Trust in your Will so that

  • Your spouse receives the income from your estate.

  • There is no Inheritance Tax to pay when you die before your spouse.

  • The capital passes to your beneficiaries after your spouse’s death.

  • The Life Interest can be flexible so that your Trustees can pass capital to your spouse, or other beneficiaries as they think appropriate.

A Life Interest Trust can also be used

  • In second marriages for the benefit of children from an earlier relationship.

  • To preserve Capital Gains Tax Relief on a property that you live in (Principal Private Residence Relief).

  • To pass capital assets to the Life Tenant (or other specified beneficiaries) to provide for future changes in circumstances discretionary.


None of the beneficiaries has a fixed right to any particular share of the Trust Fund, but the Trustees have discretion as to which Beneficiary benefits and to what extent. Discretionary trusts can be used to protect your Beneficiaries from unfortunate relationships, profligate lifestyles etc.


In a Lifetime Interest Trust, you can be a Trustee and control who is appointed as a Trustee in the future.

  • Trustees can only act according to the terms of the deed.

  • You may choose Professional Trustees – and we provide this service.

  • You should choose your Trustees carefully.

As long as you can be confident in your Trustees, setting up a trust fund offers opportunities to manage your family’s future security in a tax efficient way, both during your lifetime and after your death.

Our team is able to work closely with your independent financial advisor and can also give advice on Wills, Probate, Personal Tax or on Inheritance Disputes.


We can help you reduce your tax burden through effective tax planning.
Expert tax planning can lead to significant tax savings so advice from our tax advisors will help you manage your assets tax efficiently.

The main areas for personal tax planning are

  • Inheritance tax planning.

  • Capital gains tax planning.

  • Estate planning.

  • Family settlements.

  • HM Revenue & Customs dealings.

Our tax planning is closely supported by our expertise in Wills & Probate and Trusts service so we are able to offer the all-round benefits of a comprehensive tax planning service.

Please kindly Contact Us to discuss how our specialist Trust & Tax Planning team can help you.

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