The Government announced a new consultation on Taxation of Trusts on 7th November which will effect inheritance tax, capital gains tax and income tax laws in the UK.
Leading national law firm Irwin Mitchell Private Wealth is providing some insight into what the announced consultation on the taxation of trusts could bring in the near future. The consultation runs until the 30th January 2019.
Anthony Nixon, IHT expert and partner at Irwin Mitchell Private Wealth, said:
“We welcome HMRC’s willingness to review the taxation of trusts and very much hope that it will result in some real simplification. Sadly, this did not happen:
- When income tax and capital gains tax on trusts were last consulted on in the first part of the 2000s;
- when HMRC, without consultation, made fundamental changes to the inheritance tax rules on trusts in 2006; or
- in the highly disappointing review of inheritance tax on trusts between 2012 and 2014.
It is good to see the new consultation document stressing that any system of trust taxation must be fair and neutral, when compared with the same taxes on individuals. But it is disappointing that, in citing in the consultation document particular tax rules “that may constitute exceptions to the principle of fairness and neutrality” HMRC only produce examples of when they think trusts pay less tax than individuals. The reverse is true in many, many cases.”
The consultation announcement can be found here: https://www.gov.uk/government/consultations/the-of-taxation-of-trusts-a-review
Exploring the use of Trusts
A trust is used to manage assets such as investments, land, money or property for other people, mostly family members. Research was undertaken to find out why people choose to use trusts.
The research asked:
- What motivates people to set up trusts and how this effects the type of trust?
- What types of trusts are available?
- What are the relationships between the settlor, beneficiaries and trustees, and how does this effect decisions and management of trusts?
- What are the costs of trusts? What are the tax benefits of creating a trust?
- What current set up factors influence trust decisions?
Have you say
You are invited to have your say by contacting:
or write to
Trusts Tax Reforms Consultation Assets and Residence Team, 100 Parliament Street,
London SW1A 2BQ