TAX ADVISERS FOR TRUSTS

A trust is an obligation binding a body (which can be an individual or a company) called a ‘trustee’ to deal with ‘property’ in a particular way, for the benefit of one or more ‘beneficiaries’.  Trusts are taxed as independent entities, and need to complete trust tax returns.  The way that the trust is taxed depends on the type of trust.

Trusts can be very useful for tax planning.  Typical scenarios include:

• In will planning, where you want to leave the family home to your spouse so that they can live there during their lifetime, but where you also want to ensure that the house goes to your children following your spouse’s death regardless of whether they remarry or not.
• Where you want to give or bequeath money to children or grandchildren, but want to retain control over how the money is invested and spent.

Whether you already have a trust or we advise you to create one as part of our tax planning advice, Kay Johnson Gee’s specialist tax advisers can undertake the compliance work and advise you on any technical issues.

The compliance work for a trust may include:

• Preparing trust accounts, completing the trust Self Assessment Tax Return and submitting it to HM Revenue & Customs
• Calculating the trust’s income and capital gains tax liabilities and advising the trustees of amounts due for payment and due dates
• Preparing forms R185, used to tell beneficiaries about amounts paid or entitlements to income from a trust
• Calculating any inheritance tax due on capital payments from the trust or on ten-yearly charges (certain types of trust only), and preparing inheritance tax returns

Advisory work for a trust includes providing tax advice on:

• Setting up trusts or adding funds to existing trusts
• The tax implications of making changes to the trust, such as varying the terms of the trust deed
• How the type of investment can affect the tax charge