In the UK, where inheritance tax significantly impacts estate planning, integrating various types of trusts can be a strategic advantage. At Continuum Wealth, we excel in providing expert guidance on using trusts within your estate planning framework to optimise your inheritance tax liabilities, ensuring your legacy is preserved according to your wishes.
The dynamics between trusts and inheritance tax are complex, with strategic trust placement playing a crucial role in the potential taxes levied upon an estate. Here’s an in-depth look at how various trusts operate within these rules:
Living trusts, or "Inter Vivos" trusts, are set up during your lifetime, allowing you to manage your assets while you're still alive. The inheritance tax implications of these trusts vary depending on whether they are revocable or irrevocable, influencing how they are treated by HMRC.
Our approach includes detailed advice on estate planning with trusts, incorporating estate trust setups, and the roles of estate planning trustees. Whether it’s a simple estate planning trust or more complex structures like estate and trust tax returns, we ensure that every aspect of your estate is considered.
Discretionary Trust Inheritance Tax: These trusts may face a 10-year anniversary charge and potential exit charges, impacting the inheritance tax due.
Interest in Possession Trust Inheritance Tax: This trust type allows beneficiaries to receive income where the tax may be due at the trust level or when benefits are passed on.
Life Interest Trust Inheritance Tax: Here, the life tenant pays inheritance tax on the income they receive, which may become part of their own estate's tax calculations.
Bare Trust Inheritance Tax: Typically used for minors, assets in a bare trust are considered part of the beneficiary's estate for inheritance tax purposes.
Estate Planning Living Trust: This involves managing your assets within a trust while you are alive to reduce estate size and potential inheritance tax.
Setting Up Trusts to Avoid Inheritance Tax: By strategically placing assets within trusts, you can legally mitigate the effects of inheritance taxes, enhancing the value passed on to your beneficiaries.
Family Trust Inheritance Tax: Family trusts, if structured correctly, can help manage and protect assets across generations, potentially lowering inheritance tax liabilities.
Life Insurance in Trust Inheritance Tax: Policies held in trust may not form part of the estate and typically do not attract inheritance tax on payouts to beneficiaries.
At Continuum Wealth, we don’t set up trusts but provide indispensable advice on navigating the intricate landscape of trusts and UK inheritance tax. Our guidance helps you understand the nuances of trust and estate planning, from the initial setup of an estate protection trust to the detailed planning required for trusts to reduce inheritance tax.
Our commitment extends through every phase of estate and trust planning, including the use of trust funds to avoid inheritance tax, ensuring that your decisions are well-informed and strategically sound.
Request AppointmentContact UsWhatsapp Chat
Note: This page is for information purposes only and should not be considered as financial advice. Always consult an Independent Financial Adviser for personalised financial advice tailored to your individual circumstances.