Using trusts to avoid Inheritance Tax

Published: 23 January 2020

Which? reports: “trusts are an often overlooked way to manage your estate when you pass away, keeping an element of control over what happens to your assets and how they can be used.  The tax treatment of trusts can also mean they're useful for reducing the amount of inheritance tax that will be paid. However, the rules around inheritance tax and trusts are complicated, and it may cost you more.”

“It's a common misconception that assets in trust are exempt from inheritance tax. You'll normally pay it at 20% when setting up a trust if it's in excess of the nil-rate band. There are some exceptions, such as if you continue to benefit from the assets.  The way a trust is taxed depends on what sort of trust it is.”  For expert guidance on whether this might be appropriate for your financial plans, please get in touch. Read more