Whether you need help setting up a trust, reviewing an existing one, or winding down a trust that has reached its end, our extensive experience means we can assist you every step of the way.
What is a trust?
A trust may be created either during an individual’s lifetime or by way of their will, and they can be used for varying purposes.
A lifetime trust is usually established by a legal document called a deed. The settlor (the person who creates the trust) would then gift cash or an asset to the trustees, who are the people who look after the trust’s assets and are the legal owners of those assets, to hold for the benefit of the beneficiaries. The trustees can be given instruction by way of a letter of wishes to detail how they wish the trust to operate once the settlor has passed away so that the trust can continue.
WR Partners specialises in providing expert advice on trusts. Whether you need help setting up a trust, reviewing an existing one to ensure it’s fully optimised, or winding down a trust that has reached its end, our extensive experience means we can assist you every step of the way.
What can a trust be used for?
Trusts can be set up for a number of reasons. Trusts are commonly used as part of estate planning and can be very effective for protecting people and/or protecting assets whilst keeping control as a trustee.
Succession planning
A trust allows you to pass on assets to future generations during your lifetime but enables you to retain control. You can also utilise a trust via your Will. A trust sets out who is to benefit from your assets, helping you plan your succession.
Changing family circumstances
Family life can be complicated and are now more diverse. Life events such as divorce, remarriage and cohabitation are becoming more commonplace which can affect the financial circumstances of those involved. Trusts can be used in these circumstances as a mechanism to help protect family wealth.
Education
Apart from family members setting aside funds to provide an income via a trust to pay for school fees, many scholarship plans are also held in trusts. The settlor may be an individual, a business or another organisation with the aim of helping the disadvantaged
Building, running, and passing on a business
A family business can be set up using a trust so that the family members protect and manage the business’s assets and ensure smooth transition on the owner’s death. Trusts are also increasingly being used to transfer ownership of a business to its employees.
Other uses for a trust can include, but are not limited to:
- Buying a home
- Retirement
- Supporting a charity or cause
- Trusts for vulnerable people
- Life insurance
- Non-UK assets
Setting up a trust
We can assist with the creation of a lifetime trust or within a will to ensure your wishes are adhered to. A trust can be set up to:
- Provide funding for a specific purpose – for example, to cover school fees
- Potentially reduce Inheritance Tax (IHT)
- allow funds or assets to be managed when someone is too young or unable to manage their affairs
- Provide for spouses, or children from previous relationships
- Ring fence assets from the consequences of a relationship breakdown
- Protect important family assets for future generations
- Protect a family business for family members and ensure smooth transfer on the owner’s death
- Transfer ownership of a business to its employees
- Charitable purposes
Trust deed review
Trust deeds are often quite complicated documents to interpret. We can assist trustees with their understanding of how the trust should operate and the responsibilities placed on them.
Trust Compliance
Compliance obligations for trustees and executors are increasingly demanding with the risk of penalties for failure to correctly file in a timely manner.
Our experienced team provides full compliance service for trusts and estates, dealing with income tax, capital gains tax and inheritance tax issue. We also cover international tax compliance requirements such as FATCA, the Common Reporting Standard (CRS) and HMRC’s Trust Register Requirements.
TRS Registration
A trust’s first interaction with HMRC will be upon its initial set up when most trusts are required to register with HMRC’s Trust Registration Service (TRS). The purpose behind this online register is to assist with the prevention of money laundering, counter terrorism financing and other criminal offences. Virtually all newly created trusts are required to register within 90 days of their creation. We can help determine whether a trust needs to register as well as assist with the registration process.
Taxation of trust
The way in which trusts are taxed can be complex, whether this is in relation to Inheritance Tax, Capital Gains Tax or Income Tax. We have extensive experience in the way in which trusts are liable to tax and can advise on the most tax efficient way to structure trusts.
R185
Beneficiaries or legatees from either a trust or death estate may be paid income during a tax year by the trustees or the personal representatives (PRs). Unless directly mandated to the taxpayer these amounts will generally have already been taxed on the trustees or PRs such that the beneficiary will receive the income net of tax into their bank account.
However, these receipts need to be tax on the beneficiary at their own rate of tax. The form R185 gives the beneficiaries the information they need to do this. The type and amounts of income and tax required to complete the R185 correctly will depend upon not only the nature of the income received but also the nature of the trust.
At WR Partners as part of the overall compliance process we can ensure that these details are declared correctly.
Trust accounts
Trustees don’t have a legal obligation to produce accounts, but they do have to account to the beneficiaries for their financial administration of the trust fund and this duty is established by case law. By keeping accounts trustees can monitor the performance and application of the trust fund detailing such points as what has happened to investments, what funds have been received and how the resources have been used.
The production of accounts ensures that where there are contentious issues in play there is evidence of good practice, professionalism, and efficient trust organisation on behalf of the trustees.
Get in Touch
We love meeting new, exciting businesses. Get in touch with our team to see how we could enhance and protect your financial position.
Or if you’d prefer to speak to someone directly just give us a call on: 08000 664 664 or email: hello@wrpartners.co.uk.
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