It may not have escaped your attention that there has been a lot of publicity recently about the Grosvenor family and inheritance.
The Grosvenor’s property fortune is estimated at £9 billion yet following the recent death of Gerald Cavendish Grosvenor, a large inheritance tax (IHT) is not expected to dent the family coffers too much. It is reported that the potential exposure to IHT has been minimised by the careful use of trusts, to preserve the family’s considerable wealth.
What is a trust?
A trust is a very popular tax and wealth protection structure and is essentially a relationship where one or more individuals hold assets for the benefit of others. Like many things in life there are different varieties and it is very important that you use the most suitable one for your circumstances.
The two main types of trust are a life interest trust where one beneficiary (known as the life tenant) is either entitled to occupy any property held subject to it, or receive the income generated on the trust property. The second type is a discretionary trust where the trustees have discretion to pay or apply income /and or capital to one or more of the individuals nominated as potential beneficiaries of the trust. In addition to saving tax this type of trust is particularly useful in situations where there is concern that a beneficiary may have financial or matrimonial difficulties in the future.
Would a trust benefit my situation?
If you are thinking about setting up a trust, either during your lifetime or via your will it is best to seek financial and legal advice. If require more information please contact one of the Private Client team here at Stephens Scown. The team have extensive experience in setting up and running all types of trusts and looking at ways to minimise the tax charges applying to them.