Trusts have historically been used for asset protection and for multigenerational succession planning. Tarnished somewhat unfairly by the press and politicians as a tax avoidance tool, trusts in fact remain relevant for tax, estate and succession planning today and still retain their historic benefits; indeed, there are a wide range of practical uses for trust from large international structures to small family trusts.
At Menzies we cater to all sorts of trusts. While we can assist with the annual accounting and tax obligations that all trustees will have, this is just a small, albeit important, part of a much bigger picture. We are able to provide advice from the initial settlement right through to final distributions and termination, as well as everything in between.
When might you consider setting up a trust?
There are a number of circumstances in which you might consider setting up a trust, including if you:
- Are considering stepping away from personal business ownership but don’t want to split up the shares between multiple family members;
- Are currently not resident or domiciled in the UK, have significant assets, and are contemplating moving to the UK;
- Are considering passing assets to the next generation(s) but want to protect the assets either against spendthrift tendencies of the next generation or potential divorce;
- Are considering how to provide for a spouse after you die whilst ultimately leaving assets to your children;
- Are considering making a significant gift to charity;
- Are considering how to provide for a vulnerable or disabled beneficiary; and
- Are currently paying, or would consider paying, school fees for your grandchildren.
We can also provide ad hoc advice in respect of existing trusts:
- To trustees seeking direct advice in relation to the trust’s affairs;
- to beneficiaries unsure of the tax implications or considering taking a distribution;
- to settlors seeking to understand the impact on ever changing legislation; and
- to all those involved in overseas trusts who are unsure of the UK tax implications.
Of particular relevance to trusts is the inheritance tax position which is subject to complex legislation and which requires great care in order to achieve accurate compliance. Indeed, the trust tax regime is currently under review by HMRC – read a summary of our comments:
Family Investment Companies
We can also provide advice regarding Family Investment Companies. These are a popular alternative to Trusts as a means of multigenerational succession planning. Individual circumstances will be paramount when determining the most suitable course of action and at Menzies, we can provide you with this advice.