Trusts and the Tax Man 10 Years On

Since 22 March 2006, most transfers into trust constitute 'transfers of relevant property' for Inheritance Tax (IHT) purposes.  Such a transfer incurs an immediate charge to IHT if the value of the assets transferred into trust exceeds the IHT nil-rate band, which is currently £325,000.

However, such trusts also incur a '10-year' charge in most cases if the value of assets remaining in the trust exceeds the nil-rate band.  Trustees are required to submit a tax return to HM Revenue and Customs (HMRC), even if there is no IHT liability, if the value of assets in the trust is 80 per cent or more of the IHT nil-rate band threshold. The return must be filed within six months of the tenth anniversary of the trust creation.

The taxation of trusts can be complex. If you have a family or other trust and are concerned about the potential

Posted by Peter Nicholas on Friday, May 06, 2016 at 10:13 AM