Trust Tax Rules

Following Gordon Brown’s announcement to abandon his controversial plan to change legislation surrounding wills, those clients whose wills are written in trusts, should seek our advice to clear up any uncertainties on the ruling.

The Treasury has decided against forcing millions of parents to rewrite their wills, which would have effectively forced them to leave assets for their children to inherit when they turn 18 or face a new tax rate.

This move will mean parents can now defer their children’s inheritance until they turn 25 and be liable to a lesser charge of 4.2 per cent.

The amendments to the Finance Bill has also dropped the decision to make it prohibitively expensive for husbands to leave their assets to spouses in a trust rather than outright.

The spousal exemption on trusts has been restored as it is mostly used by Muslim families with Islamic wills who are not allowed to pay or receive interest under Sharia law.

It is recommendable for any individual with a will in place to seek professional advice in order to fully understand the rules surrounding wills and trusts.