Trusts are subject to Income Tax, Value Added Tax, Capital Gains Tax and Inheritance Tax in much the same way as individuals. Each tax has important differences in the way it treats trusts, generally treating the trust as a higher rate taxpayer with little or no personal allowance. Inheritance Tax in particular has a special regime for the taxation of some types of trust, where tax is levied every 10 years on a revaluation of trust assets. Tax should never be the driving force behind the creation of a trust, but it is important that trustees have a broad understanding of the tax position.
This will be one of the topics reviewed in more depth during the forthcoming Trustee Training Events at Rhug estate and Ragley Hall, organised in conjunction with the CLA. For more details:
This is the third of 10 brief ‘Need to Know’ notes for trustees and their professional advisers.