Setting up a Trust
Setting up a Trust can be a flexible and tax effective way to provide for your loved ones.
Setting up a Trust
What should you consider?
Trusts offer you flexible, tax efficient structures to pass on or protect the family wealth to benefit your family and dependants in the most beneficial way.
We are specialists in advising on the creation and administration of Trusts, and in particular, in relation to the preservation of wealth. Trusts have long been used as vehicles to offer protection to family wealth.
Why should I consider legal assistance
when setting up a Trust?
Setting up a Trust can be a complicated process. There are numerous types, each with varying rules and benefits. Understanding which one is right for you can be difficult and daunting prospect, so discussing your options with an experienced legal expert is strongly advisable.
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about setting up a Trust
A Trust is a way of managing money or other assets (for example land or property). There are different types of Trust which behave differently and are subject to different tax regimes. You can set up a Trust for a number of different reasons, for example to protect family assets; to manage assets for someone who is too young or cannot manage their own assets because of a disability or to pass assets over to someone else during your lifetime or when you die. Access our guide to understanding Trusts here.
Each type of Trust is managed differently and can be subject to different Tax regimes so it is important to consider at the outset the right Trust to cover the particular objectives of the settlor.
With this type of Trust the beneficiary is entitled to all of the income and capital at any time once they are over 18. This is usually used to pass assets to children so that the Trustees can look after the assets until the child is old enough.
Interest in Possession Trusts
With this type of Trust the beneficiary has the right to receive all of the income as it arises. The capital of the Trust will pass differently. For example, a Trust could be set up containing a property. The terms of the Trust state that beneficiary number 1 is entitled to the income of the Trust and so they are entitled to receive any rental income from the property as it arises. They are not entitled to the property itself.
With this type of Trust the Trustees have the discretion as to how to use the income and capital. The Trustees can have the power to decide what gets paid out of the Trust; which beneficiary to make any payment to and when to make the payment. These sorts of Trusts are usually set up when the particular needs of each beneficiary is as yet uncertain.
To find out more about Nil Rate Band Discretionary Trusts, read our handy guide by clicking here.
Moreover, there are specific guidelines in relation to gifting assets, which is becoming increasingly popular, particularly for parents. For more information on gifting assets and the tax implications surrounding it, please click here.
We can help you consider which type of Trust would better suit your objectives and what the implications of setting up a Trust may be.
Trusts are set up for a number of reasons which include the control and protection of family assets, to pass on assets during your lifetime, or on your death, the financial protection of a person who may be too young to handle their affairs and more. Similarly, you may be a party to an existing Trust.
The Trustees in effect “own” the Trust assets. Their role is to manage the assets in accordance with the Trust deed. This will usually involve dealing with the day to day management of the assets, declaring and paying any tax due on the Trust, dealing with the investment of the trust assets, accounting to the beneficiaries and sometimes using their discretion to decide how best to manage the Trust (if this is provided for in the Trust deed).
As there are so many circumstances in which it may be worth considering the creation of, or administering a Trust fund, at Goughs we are happy to offer advice on what might work for you. We consider each individual’s unique objectives and can advise on the types of Trust available to you. We can help you consider which type of Trust would better suited to your objectives and what the implications of setting up a Trust may be. This could include tax charges on the creation of a trust, or considerations about your own future. We can also advise you on the things to consider when choosing Trustees and what the role would entail.
We can also assist with the ongoing administration of the Trust including registering the Trust with HMRC, preparing annual trust accounts and tax returns, the preparation of ongoing paperwork for the trust.
Assistance can even come in the form of the winding up of the Trust fund when appropriate. This could include finalising the tax position regarding the Trust and preparing paperwork to deal with the final distributions.
I engaged the services of Goughs Solicitors in Trowbridge, in particular Ailie Peacock, to act on my behalf for the sale of my house. Ailie was always clear with her advice, acted in a timely manor and answered any questions I had almost immediately. She was very proactive in dealing with the other parties involved in a slightly convoluted chain.
Ailie also managed a very late request from our buyers with calm efficiency and the utmost professionalism. The end result was a smooth sale and completion, with remarkably little stress on our part. I would not hesitate from using them again.
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Excellent service as usual.
Superb once again.
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The solicitor I dealt with at Goughs, Rhianna Cole, was an absolute star, I cannot fault her in any way at all. She made everything in the situation I was in so easy to understand, and she guided me through an extremely stressful time, with extreme professionalism, yet a very personal and sensitive touch. Can't big them up enough.
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Sarah was very thorough and kept in touch with us all the way through the process. Very glad we went with Goughs and hopefully Sarah will be assisting my parents with their property regarding Land Registry
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