Can trusts eliminate the tax I pay?
Inheritance tax is a tax levied on your children after they lose both parents and is charged at a huge 40%. A recent article by money marketing showed that £1.3bn is paid every year needlessly by people who do not take action to mitigate against Inheritance Tax (IHT). With some simple estate planning utilising Trusts you can reduce or eliminate the inheritance tax you pay and increase the amount of inheritance passed down to your children.
Assets assigned to Trust can potentially reduce the tax payable.
Trusts are also subject to tax, but appropriate management by the Trustees can reduce any amount due substantially.
Trusts can significantly reduce the impact of tax on future generations.
Trusts have been instrumental in mitigating tax since Medieval times. Trusts were initially created for the Nobility and wealthy landowners to avoid paying taxes to the Crown.
The introduction of Trusts led to a distinct loss of tax revenue and it did not take long for the first anti avoidance statute to be introduced; by Henry VIII in 1535. Since then, there have been many changes to Trusts and their uses and equally to the Inland Revenue rules which affect them. Nowadays, you don’t have to be a Nobleman, or a wealthy landowner to want to take advantage of the many tax strategies Trusts can provide. Many people now look to using Trusts as a means of mitigating tax which would otherwise be payable.