Adele Cooper, Manager for Lovewell Blake

Providing experienced advice with regard to the formation and administration of trusts, helping you utilise the benefits to protect yourself and your family.

Adele Cooper, Manager for Lovewell Blake

What is a Trust?

A Trust is created when a person (the settlor) transfers assets such as shares, property or cash to trustees, for them to administer for the benefit of the settlor’s chosen beneficiaries.

A Trust can be established by deed during the settlor’s lifetime, or by the terms of a Will, to take effect on the settlor’s death.

Trusts can be used as a vehicle to tax efficiently transfer assets to others, or to protect assets, both from otherwise punitive tax measures and from third party claims.

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 rules that apply to Trusts are complex and it is important that you seek advice before setting one up.  

Catherine	Jeffery

Different because you are

We pride ourselves on providing individually tailored services to our clients. Whatever your aspirations and priorities in business and life, we will be by your side with expert advice from local specialists. It is because your needs are unique, that the solutions we provide are distinct and personalised to you.

Our staff can provide you with specialist advice on all Trust issues including:  

  • creation of Trusts
  • use of Trusts for: inheritance tax planning, estate planning, capital gains tax and succession planning

  • distribution of Trust income and assets
  • compliance and administration: general administration, accounts and bookkeeping, online Trust Registration Service, annual self assessment tax returns and liabilities, inheritance tax returns and liabilities, elections and correspondence with HM Revenue & Customs
  • winding up of Trusts.

Being experienced chartered accountants for individuals, Lovewell Blake can offer assistance with all areas of personal tax.  


What is a Trust and how does it work?

A trust is an arrangement where assets can be held on behalf of someone else. The settlor creates the trust and transfers assets into it. The assets are held in the Trust for the ultimate benefit of the beneficiaries. Beneficiaries are commonly young children or family members. Trusts are managed by Trustees, who can be the settlor, other family members or professional advisers such as accountants.

Trusts can be a very tax efficient way of reducing exposure to some wealth taxes, such as inheritance tax, when structured under a comprehensive tax planning arrangement. Trusts are also commonly used to 'park' assets and control the time at which the beneficiary has full entitlement to the asset. Professional advice is absolutely critical if you are considering the use of Trusts. Speak to one of our specialists or get in touch.

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