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Trusts and wealth management in Norfolk, Suffolk and Cambridgeshire

Trusts

What is a trust?
Trusts are used extensively to provide tax and practical benefits.

A trust is created when a person (the settlor) transfers assets such as shares, property or cash to trustees for the benefit of their chosen beneficiaries.

A trust can be established by ‘Deed’ during the settlors lifetime, or can be included in a ‘Will’ to take effect on the settlors death.

Advantages of establishing a trust
A trust can provide various tax and practical benefits:

  • Tax savings
In certain circumstances, a trust can provide significant income tax savings, for example:

Mr ‘X’ is a higher rate taxpayer. He wishes to make a gift of an investment property to his three grandchildren and decides to settle it on a discretionary trust. The property produces a rental income of £10,000 per annum.


Mr ‘X’ would normally pay tax on the income at the rate of 40%. The trustees will instead pay tax at 45% on most of the income. However, if an appropriate amount of the net trust income is distributed to the grandchildren, and they have sufficient unused personal allowances, they will be able to recover all of the tax paid by the trustees (a tax saving for Mr ‘X’ and his family of £4,000 per annum).

  • Control
A trust will enable you to gift valuable assets (as part of your inheritance tax planning) without losing control of the assets

  • Protection
Assets held in trust are protected to a greater extent from the claims of creditors in bankruptcy or divorce

  • Flexibility
You can allocate the income/capital of the trust as you wish.

The tax rules that apply to trusts are complex and it is important that you seek advice before setting up a trust. We have a great deal of experience when it comes to setting up and managing trusts. We can help you find the right legal advice and help with all aspects of the tax planning and ongoing administration.
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Helpful documents

Trusts
Details of our trust services.
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"Lovewell Blake help us with much more than just the year end accounts and tax. They facilitated a valuable strategic planning exercise for us and also provide independent input at board meetings, ensuring these remain business focussed."
 
 

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