It’s all in the planning when it comes to Trusts. It’s important to plan and find out what would suit you. Our team of Trusts and Estate Planning solicitors are ready to talk through your options.
Trusts often form part of Estate Planning and are used to pass assets down to future generations. They’re also there to protect assets in the eventuality of divorce, bankruptcy, or poor management by the beneficiary.
Contact our Trust & Estate Planning Solicitors at Taylor Emmet
When considering a Trust, we’re the best people to talk to. We can help guide you through the process, so you know your options.
When considering a Trust, we’re the best people to talk to. We can help guide you through the process, so you know your options. We can also advise you on things to be aware of. That way, you know you’re always making an informed decision.
The definition of a trust
Let’s explain what we mean by a ‘Trust’. Here’s an example.
A grandparent opens a bank account for a grandchild. This is called a ‘bare trust’ because the money belongs to the child and is only held by the adult because the former is too young. When the grandchild reaches the age of 18, they can insist the money and control of the account is handed over.
One of the most common forms of a Trust is the joint ownership of land or property. English law states that when two people buy a house, for example, they hold it ‘on Trust’ even though they probably hold it for themselves, so the trustees and beneficiaries are the same.
However, when most people refer to a Trust, they usually talk about something a little more complicated, perhaps a ‘discretionary Trust’ that allows the trustees to decide how and when to distribute the fund among the beneficiaries.
You can also establish an ‘interest in possession Trust’ that entitles at least one person to receive an income or occupy a property held by the fund.
Managing a trust
Here’s a little summary about managing a Trust.
It used to be the case that if a Trust did not generate a tax liability, it did not have to be registered with HMRC, but this rule has changed. Now, most Trusts have to be formally recorded with the Inland Revenue, irrespective of their tax situation.
HMRC should be informed of new Trusts within 90 days of formation. Trustees also have 90 days to update the registration if circumstances surrounding the Trust change.
It is very common for married couples to create trusts in their wills to cover 50% of their joint property as a way to ringfence part of the asset from the clutches of care home fees. However, many trustees act in a non-professional capacity and are unlikely to be aware they are required by law to register trusts of this kind, even though there is no tax to pay.
To lodge a trust with HMRC, you need to provide basic information about who is involved. For example, details of trustees, the beneficiaries and the person who created the trust. The register must also be updated if these details change at any time.
If you are unsure about your reporting obligations as a trustee, it is important to obtain specialist professional advice. Failing to comply could result in financial penalties from HMRC, so if you are in any doubt, always seek assistance.
What next?
Our knowledgeable team is here to tell you when a trust might be suitable, guide you through the myriad choices and advise and assist trustees in running a trust.
We can explain any legal issues that might arise and deal with financial aspects, such as the preparation of accounts and completion of tax returns.
To find out more about setting up and running a trust, don’t hesitate to contact us to discuss your individual circumstances on 0114 218 4391, email our Client Services team PrivateClient.ClientServices@ or complete our online enquiry form.
