Submitted by Sestini & Co
| on Tue, 07/01/2014 - 10:32 | In Uncategorized
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http://acorncentre.co.uk/93d3cuYWNvcm5jZW50cmUuY28udWsfa7b439a/acor=1009605.html On 6 June 2014 HMRC issued its latest consultation paper on the taxation of relevant property trusts. This is likely to come into effect from 6 April 2015. All relevant settlements created, added to or restructured after 6 June 2014 will be affected.
http://inkimages.net/product-category/adult/ Will this affect me? It might if:
- You are the Settlor of property/assets into a trust (what is a Settlor?)
- You are the beneficiary of property/assets already in trust (what is a beneficiary?)
What is a property in trust?
Putting property into trust is a way of protecting your wealth including real estate and other assets for yourself and your loved ones. You can appoint multiple beneficiaries and divide your estate as you see fit. Property in trust does not form part of any beneficiaries’ estates so anything placed in Trust for them cannot be claimed in relation to any financial difficulties they experience. Read more about property in trust here.
The new rules introduce a new single nil rate tax band allowing a specified portion of the property in trust to be given to the beneficiaries free of inheritance tax.
The Settlor (or their Personal Representatives within 2 years of the Settlor’s death) can decide what proportion of the nil rate tax band is allocated to each of their trusts. This will need to be documented on a specific form otherwise HMRC will assume the trust has no nil rate tax band allocation and it will be subject to the relevant inheritance tax.
Property trusts incur a charge every ten years, on the ten-year anniversary on being set up and every ten years after that. The charge at the ten-year anniversary will be fixed at 6% as opposed to the present position where the maximum rate is 6% although the charge can vary depending on a number of factors which we can explain for your own personal situation.
Inheritance tax will require you to do a self-assessment tax return in future, unlike the present position where it is possible to opt for the charges to be calculated by HMRC.
As ever if you think these changes might apply to you or are interested in setting up a trust or reviewing your succession planning, please do contact us for more information.