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Simplification is possible
Key points
- Clients would like trusts to be more manageable and user friendly.
- The tax on winding up or merger will depend on the type of trust involved for inheritance tax purposes qualifying interest in possession or relevant property.
- IHTA 1984 s 81 treats the property transferred between settlements as remaining in the original settlement even though the property is comprised in a single settlement.
- The deeming provision in s 81 is disapplied if a person becomes beneficially entitled to the trust property ‘in the meantime’.
- There may be an option in suitable cases to consolidate trusts by appointing to a company.
- Limitations include that the arrangements must be long term and the perpetuity period of originating settlement(s) would need to be retained so as not to breach the law on perpetuities.
For sophisticated families of a certain means the existence and operation of trusts has become...
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