The circle of trust

Saadia Javed, Senior Associate

Needless to say trusts are misunderstood and often a times misused. But if implemented correctly they offer a plethora of planning opportunities which comes with a side of control and protection of assets. Whether parents are trying to provide for their children, grandparents making provisions for their grandchildren, business owners trying to structure their exit or succession planning or even the use of trusts in Wills or through deeds of variation on death their benefits are countless. Although a legal fiction (the academics will appreciate the shout out!) they offer just the right blend of asset protection and control.

One of the major attractions of using a trust is the ability to defer the capital gains tax charge which is usually triggered when an asset other than cash is gifted. This makes it a piece of planning which is accessible without having to settle a tax liability created without cash being realised to fund this.

Some of our recent use of trusts include:

• Using trusts as a shareholder of a family investment company for the benefit of children and grandchildren.
• Utilising trusts in Wills to ensure that the assets of the first to die are not redirected by the survivor in favour of a new partner or family thereby ensuring that the children of the marriage receive their intended inheritance.
• Using trusts to cater for the potential development value of parcels of land as a means of planning for the future generations.
• Gifting shares into trust prior to a sale of a business.
• Gifting trading shares into a trust as means of succession planning in favour of children and the wider family.

There are of course compliance and tax triggers that stem from trusts however generally speaking these are often outweighed by the benefits and protection trusts provide.

If you would like to get in touch with our tax team, please email [email protected] or call 0161 832 3434.