Benefits of setting up a UK Trust

 

The advantages of trusts have ranged from Inheritance Tax reduction to Income Tax mitigation and Capital Gains Tax deferral.

Trusts do offer other advantages which, when combined with the taxation advantages, can make the arrangement even more appealing.


Asset Protection

Divorce

DID YOU KNOW? The ONS now estimate that 42% of UK marriages now end in divorce.

In light of a risk of future divorce, parents and grandparents are enormously conscious that whatever they choose to pass down to their children and grandchildren could become diluted in the event of a divorce.

A Discretionary Trust could be an ideal solution in this instance. Although children can potentially benefit from a Trust arrangement, if they become divorced, whatever capital is invested in the Trust cannot be attacked in the divorce settlement.

Bankruptcy

Unforeseeable Creditors and Long Term Care

Succession Planning

Trusts, unlike ‘wills’, cannot usually be contested; therefore, clients can be sure that the beneficiaries of the trust (which may include themselves) will benefit in the proportion of the trust assets that are intended.

This benefit also applies for clients who wish to change their wills in favour of other family members, but who fear that this may be contested on their death, or have estates in excess of the nil rate band and want some Inheritance Tax planning.

Anonymity

There are a variety of legitimate reasons why someone would wish to preserve anonymity.  Commercial anonymity may be desirable where negotiations for patents, trademarks, royalties or distribution rights are concerned.

Financial anonymity may sometimes be considered desirable where knowledge of provisions made for beneficiaries could complicate new relationships.

Delaying the receipt of capital to children/beneficiaries

A Trust could be ideal in circumstances where children/beneficiaries are too young or could act irresponsibly, so a trust could ensure value is not frittered away.

You could instruct the trustees to defer payment to family members until either an event takes place, for example marriage, or a certain age is attained.

Continuity of ownership

There are many benefits to setting up a trust but you must carefully consider what assets you want to settle and if there are any tax implications. We can assist with any questions you may have and whether a trust is the best way to go.

Please click here for more information on setting up a UK trust or contact us today.