Trusts are not just a means of saving tax, they can offer you a whole variety of benefits which often make them appropriate if you have farming and agricultural assets.
You can use trusts (either long or short term structures) to:
- Crystallise any tax relief available at your death to ensure that this is not wasted without jeopardising the financial position of a surviving spouse. This can also lead to the possibility of additional tax savings opportunities by later swapping 'relievable assets' (such as shares in a private trading company, farmland etc) within the trust for non relievable assets (including cash).
- Pass assets from you to others whilst retaining an element of control. For example, a trust arrangement may allow you to start passing assets to the next generation whilst guarding against possible future claims from creditors and spouses or even your beneficiary's own misguided actions.
- Hold assets where you have not yet decided who should benefit from them, or if you wish to allow a trustee to make the decision for you at a later date (perhaps depending upon family or tax circumstances at the time).
- Help to protect your assets from care home fees.
- Balance fairly the interests of your spouse and children after your death, especially in second marriage situations.
Work undertaken recently includes:
- Advising upon the appropriate arrangements to hold family property to include the introduction of property into a farming business and of the use of trusts in order to maximise the agricultural and business property relief available to reduce future inheritance tax.
- Advising upon a strategy to reduce the present income tax liability by utilising the unused tax allowances of minors (such as grandchildren).
- Considering the use of trusts and gifts into trusts of property as part of an overall strategy to minimise inheritance and capital gains tax and to provide protection in the case of a divorce.
- Advising upon post death will variations (possible within two years of the death of an individual) to create a gift of relievable property into trust in order to crystallise the tax relief available (which may have been lost if these assets were simply allowed to pass to a surviving spouse outright).