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Is it time?
Key points
- Trustees of discretionary trusts are being squeezed on taxation as impending changes increase the tax liabilities of trusts.
- The income tax on such non-savings and savings income increases from 20% to 45% from 6 April 2024.
- Special anti-fragmentation rules apply to prevent an individual creating several trusts with the intention of keeping the trust income of each of those trusts under £500 a year to avoid income tax.
- With regard to CGT the AEA is set to fall to £1 500 (with a minimum of £300 for multiple trusts) from 6 April 2024.
- It makes sense for trustees to review their investment strategies to enhance tax efficiency and improve investment returns for beneficiaries.
- Investment bonds could be an attractive option from a taxation standpoint for trustees seeking capital growth.
As we move towards the new 2024-25 tax year it is important for trustees of discretionary trusts...
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