Private Wealth /

Trusts, tax & estate planning

Creating and preserving your legacy.

Considering estate and succession planning during your lifetime gives you the opportunity to structure your affairs in a flexible and tax-efficient way for the short and long term.  You may be looking to provide for children or grandchildren without them having control too soon, preserve business assets, or protect a disabled child.  To ensure that your wealth is structured in line with your priorities, you need an expert adviser to provide you with creative and individually tailored advice.  While the scope for people domiciled in the UK to create new trusts tax-efficiently is more restricted than in the past, there are still a number of planning options.

Make an enquiryMeet the teamTrusts, tax & estate planning

  • Key contact

    Peter Daniel

    Peter Daniel

    Partner - Head of Private Wealth

    ArrowView profile

  • The Team

    Our lawyers have the expertise and experience to provide you with creative, personalised solutions in a clear and understandable way.

    ArrowMeet the team

  • Our Publications

    Discover a wealth of invaluable guidance in the form of guides and brochures written by our expert lawyers.

    ArrowSee our downloads

  • Does your Will need updating?

    With 10 simple questions, discover whether you need to update your Will in order to protect your wishes.

    ArrowTake our quiz today

  • eprivateclient-top-law-firm2023

About

Experienced lawyers to assist you in all areas of estate and succession planning

Our team will guide you through the available tax and succession planning opportunities and provide effective strategies to deal with issues which could impact the transfer of wealth including marital breakdown, financial immaturity, mental incapacity and providing for disabled beneficiaries.

We support individuals, families and trustees in the establishment and administration of trusts and other estate planning structures. We also advise on the ongoing management of existing trusts, including changes of trustees, restructuring and taxation.

We know that each and every client is unique so we spend time gaining a thorough understanding of your specific circumstances and what is important to you and your family with regards to succession. We will then work with you to manage your estate in a way that is tax-efficient and fulfils your wishes for your family’s future.

Some of the areas our specialist estate planning, tax and trust lawyers advise upon include:

  • Advising upon and establishing trusts including living trusts, interest in possession trusts, and legacy trusts
  • The administration of trusts, including advising upon the tax consequences of estate planning and trusts, and preparing tax returns
  • Wills for clients with complex and/or high value estates
  • Post-death estate planning, including deeds of variation and the restructuring of will trusts with retrospective effect for inheritance tax purposes
  • Advising entrepreneurs and owner-managed/family businesses on tax and succession planning
  • Preparing and registering a Lasting Power of Attorney (LPA)
  • All matters relating to the Court of Protection

Explore the nuances of some of the most common aspects of UK/USA cross-border tax and estate planning.

Spotlight

Trusts for business owners

For clients who own trading businesses, trusts can be useful succession and tax planning vehicles to ensure the preservation of our clients’ wealth. For example, it may be possible to transfer shares in a business into a trust free from inheritance tax, while also optimising the capital gains tax position.

Spotlight

Trusts for future generations

Where clients wish to provide for their children and grandchildren (e.g. for the provision of school fees), it can be prudent to create a trust of up to the available inheritance tax allowance (known as the nil rate band). There will be no inheritance tax on creation and a new trust of this type can be created every seven years. Also, if clients have surplus income, outright gifts or gifts into trust out of this surplus income can be made which are completely exempt from inheritance tax.

Jump to the top of the Trusts, tax & estate planning page

Trust Administration

As a trustee, you are responsible for looking after assets on behalf of beneficiaries. This requires up-to-date knowledge of trust law and the reporting requirements that go with it. If you fail to exercise care when performing your duties, you may incur personal liability and become financially liable for losses to which you have contributed.

We help trustees stay on top of their obligations. We can assist in the administration of the trust to the required standard, removing the burden from trustees and avoiding HMRC penalties. Our service covers a range of tasks including:

  • ensuring the trustees understand the terms of the trust
  • helping trustees understand their legal powers and responsibilities
  • managing trust administration for trustees throughout the life of the trust
  • reviewing the trust regularly as required by the Trustee Act 2000
  • preparing the annual trust accounts
  • dealing with trust tax compliance
  • providing beneficiaries with information
  • acting as professional trustees.

Whether you wish to create a trust or are a trustee yourself, we have the expertise to assist you. We offer a complete service, from trust formation right through to ongoing trust management and reporting. You can be confident of meeting all legal and financial obligations for the life of the trust and beyond.

Duties of Trustees

Trustees are responsible for managing the trust efficiently to protect the assets and interests of the beneficiaries.

As part of this, there are several legal duties that you must fulfil, and five statutory powers which you may use to carry out your duties. Failure to comply with your duties and use your powers honestly can have serious consequences, including personal liability for any losses, so it is important to understand what your duties and powers are.

The duties of a trustee

  • Care and skill: You must use reasonable care and skill when managing the trust, taking into consideration your level of knowledge. Professional trustees are held to a higher standard.
  • Comply with the terms of the trust: Trustees must follow the provisions of the trust and not act outside the scope of their authority.
  • Honesty: You must act honestly in the best interests of the beneficiaries and not take advantage of or profit from any position of power you may have.
  • Avoid conflicts of interest: You must avoid any conflict between your personal interest and those of your role as trustee, ensuring you act in the best interests of the trust’s beneficiaries at all times.
  • Act impartially and in good faith: You must make decisions based on what is best for the beneficiaries, without favouring any one person or group over another.
  • Invest trust funds sensibly: Trustees have a duty to protect the trust’s funds and invest them in a way that is likely to give the greatest returns available within reasonable limits.
  • Keep accounts: You will need to keep accurate and up-to-date records of all financial transactions made on behalf of the trust and complete annual tax returns where required.
  • Seek professional advice: If necessary, you must seek out specialist advice to fulfil your duties competently.
  • Act unanimously: Decisions must be agreed upon by all trustees, with a few limited exceptions.

The five statutory powers of trustees

  • Investment: Trustees have the power to invest the trust’s assets which they must balance against a duty to ensure investments are reasonably diversified to reduce risk and changed if necessary for the benefit of the beneficiaries.
  • Insurance: Trustees can arrange insurance cover for any assets held in trust or liabilities incurred by them as trustees.
  • Advancement: Under certain circumstances, trustees can advance money from the trust to a beneficiary, up to the whole of the beneficiary’s share.
  • Delegation: Trustees can delegate certain responsibilities and decisions to an appropriate person or body, such as a professional adviser.
  • Maintenance: For certain types of trusts, if a beneficiary is aged under 18 years, you are able to apply income from the trust towards the maintenance, education and benefit of the minor beneficiary. The rest is accumulated and added to the trust’s capital.

Why is this important?

If a trustee fails to discharge their duties, or oversteps the limits of their power, they may be held personally liable for any loss or damage suffered. The trustee may also be removed from their position. It is therefore important for trustees to understand their duties and powers and act with the proper standard of care when managing the trust.

For more information or advice about your duties as a trustee, please contact us.

Family Trusts

Creating a lifetime trust, such as a family trust, can help ensure that your assets pass tax-efficiently to your loved ones, while protecting trust assets from assessment for residential care fees. We can help you plan ahead and preserve family wealth for the next generation.

Find out more.

Will Trusts

Created by your will and taking effect on death, a will trust can be an effective way of passing wealth to your loved ones while avoiding unnecessary Inheritance Tax.

Find out more.

International Estate Planning

If you are a foreign national living in Britain or have overseas interests that may be subject to taxation abroad as well as here, then your estate plan will need to take into account multiple jurisdictions. This adds more complexity but can also create opportunities for reducing your tax liabilities.

Our international estate planning solicitors can assist you with effective strategies for structuring your global wealth. We can help you:

  • Move wealth between countries
  • Change your domicile for tax purposes
  • Set up trusts that are compliant with different sets of laws
  • Minimise the impact of double taxation
  • Transfer assets during your lifetime
  • Support family members around the world
  • Manage your intentional portfolio for the benefit of future generations

It is not possible to achieve these benefits with a will alone. Wills, trusts and other wealth-management structures often work better when combined than individually.

Inheritance Tax (IHT) is charged on death at 40% of the value of assets over a certain threshold, which at the moment is £325,000. If no reliefs were applied to an estate worth £1 million,  IHT of £270,000 would be due.

The burden of IHT has increased significantly over the last decade because the threshold above which tax is charged  has not changed for over a decade unlike the value of UK property. However, there are exemptions and reliefs that provide opportunities to mitigate your exposure to tax. You could, for example:

  • Set up trusts that can hold assets outside of your estate and still pass them down to your children
  • Use your annual IHT exemption to give up to £3,000 away each year or £6,000 if you haven’t used the previous year’s allowance
  • Use your nil-rate band to transfer assets to a partner or spouse free of IHT
  • Make use of the agricultural and business property reliefs

A professionally drawn estate plan, with proper tax advice, is the best way to reduce your IHT liability and ensure your interests are protected. Your solicitor will be happy to discuss your options in confidence.

Lasting power of attorney

A Lasting Power of Attorney is a legal document that allows someone to make decisions on your behalf should you become unable to do so yourself. You can give instructions on what should happen to your money, health or well-being in the event of old age, illness or injury that affects your mental capacity. While a will ensures your wishes are carried out after death, a Lasting Power of Attorney is created to protect your interests during your lifetime.

Find more information on our lasting power of attorney FAQs page.

Trusts, tax & estate planning Publications

  • family eating

    Lifetime Giving Handbook

    We have prepared a handbook to answer the most pressing and common lifetime giving questions and issues including; giving property to the next generation, gifts to vulnerable individuals, how best to fulfil an individual’s philanthropic ambitions, foreign gifts and the tax benefits associated with gifts of art.

    Download now

  • trusts and school fees flyer

    Lifetime Giving | Trusts and School FeesA guide to tax efficient arrangements - A guide to tax efficient arrangements

    Many families contend with paying school fees running into hundreds of thousands of pounds per child over the course of their education. This guide examines some tax efficient arrangements that other family members (typically grandparents) can use to contribute to these costs.

    Download now

  • Coronavirus school closures – Should you consider Parental Leave?

    Lasting powers of attorney

    A guide on making an LPA covering everything you need to know when considering giving another person certain authority to make decisions, in circumstances where you no longer have the mental capacity to do so on your own.

    Download now

  • cryptocurrency coins

    How are your cryptoassets taxed?

    Guidance for individuals who hold cryptoassets, explaining what taxes they may need to pay, and what records they need to keep. Also included is information for businesses and companies about the tax treatment of cryptoasset transactions.

    Download now

  • Coronavirus (COVID-19) support

    Decrypting a digital world

    An overview of some of the key areas of interest in relation to cryptoassets, their legal treatment in the UK, and how they should be considered in tax and estate planning.

    Download now

  • Private Wealth

    Why might a trust be of benefit?

    A guide considering the many reasons and many circumstances where a trust might be of benefit.

    Download now

  • "The team is first-class - knowledgeable, approachable and offers excellent value for money"

    Legal 500, 2020

Trusts, tax & estate planning insights

View all insights

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Need some more information? Make an enquiry below



    Trusts, tax & estate planning key contacts

    Trusts, tax & estate planning

    Trusts, tax & estate planning

    Trusts, tax & estate planning

    Creating and preserving your legacy.

    Considering estate and succession planning during your lifetime gives you the opportunity to structure your affairs in a flexible and tax-efficient way for the short and long term.  You may be looking to provide for children or grandchildren without them having control too soon, preserve business assets, or protect a disabled child.  To ensure that your wealth is structured in line with your priorities, you need an expert adviser to provide you with creative and individually tailored advice.  While the scope for people domiciled in the UK to create new trusts tax-efficiently is more restricted than in the past, there are still a number of planning options.

    • Key contact

      Peter Daniel

      Peter Daniel

      Partner - Head of Private Wealth

      ArrowView profile

    • The Team

      Our lawyers have the expertise and experience to provide you with creative, personalised solutions in a clear and understandable way.

      ArrowMeet the team

    • Our Publications

      Discover a wealth of invaluable guidance in the form of guides and brochures written by our expert lawyers.

      ArrowSee our downloads

    • Does your Will need updating?

      With 10 simple questions, discover whether you need to update your Will in order to protect your wishes.

      ArrowTake our quiz today

    EXPERIENCED LAWYERS TO ASSIST YOU IN ALL AREAS OF ESTATE AND SUCCESSION PLANNING

    Our team will guide you through the available tax and succession planning opportunities and provide effective strategies to deal with issues which could impact the transfer of wealth including marital breakdown, financial immaturity, mental incapacity and providing for disabled beneficiaries.

    We support individuals, families and trustees in the establishment and administration of trusts and other estate planning structures. We also advise on the ongoing management of existing trusts, including changes of trustees, restructuring and taxation.

    We know that each and every client is unique so we spend time gaining a thorough understanding of your specific circumstances and what is important to you and your family with regards to succession. We will then work with you to manage your estate in a way that is tax-efficient and fulfils your wishes for your family’s future.

    Some of the areas our specialist estate planning, tax and trust lawyers advise upon include:

    • Advising upon and establishing trusts including living trusts, interest in possession trusts, and legacy trusts
    • The administration of trusts, including advising upon the tax consequences of estate planning and trusts, and preparing tax returns
    • Wills for clients with complex and/or high value estates
    • Post-death estate planning, including deeds of variation and the restructuring of will trusts with retrospective effect for inheritance tax purposes
    • Advising entrepreneurs and owner-managed/family businesses on tax and succession planning
    • Preparing and registering a Lasting Power of Attorney (LPA)
    • All matters relating to the Court of Protection
    • eprivateclient-top-law-firm2023

    Explore the nuances of some of the most common aspects of UK/USA cross-border tax and estate planning.

    SPOTLIGHT

    Trusts for business ownersopen

    For clients who own trading businesses, trusts can be useful succession and tax planning vehicles to ensure the preservation of our clients’ wealth. For example, it may be possible to transfer shares in a business into a trust free from inheritance tax, while also optimising the capital gains tax position.

    Trusts for future generationsopen

    Where clients wish to provide for their children and grandchildren (e.g. for the provision of school fees), it can be prudent to create a trust of up to the available inheritance tax allowance (known as the nil rate band). There will be no inheritance tax on creation and a new trust of this type can be created every seven years. Also, if clients have surplus income, outright gifts or gifts into trust out of this surplus income can be made which are completely exempt from inheritance tax.

    Jump to the top of the Trusts, tax & estate planning page.

    Trust Administration

    As a trustee, you are responsible for looking after assets on behalf of beneficiaries. This requires up-to-date knowledge of trust law and the reporting requirements that go with it. If you fail to exercise care when performing your duties, you may incur personal liability and become financially liable for losses to which you have contributed.

    We help trustees stay on top of their obligations. We can assist in the administration of the trust to the required standard, removing the burden from trustees and avoiding HMRC penalties. Our service covers a range of tasks including:

    • ensuring the trustees understand the terms of the trust
    • helping trustees understand their legal powers and responsibilities
    • managing trust administration for trustees throughout the life of the trust
    • reviewing the trust regularly as required by the Trustee Act 2000
    • preparing the annual trust accounts
    • dealing with trust tax compliance
    • providing beneficiaries with information
    • acting as professional trustees.

    Whether you wish to create a trust or are a trustee yourself, we have the expertise to assist you. We offer a complete service, from trust formation right through to ongoing trust management and reporting. You can be confident of meeting all legal and financial obligations for the life of the trust and beyond.

    Duties of Trustees

    Trustees are responsible for managing the trust efficiently to protect the assets and interests of the beneficiaries.

    As part of this, there are several legal duties that you must fulfil, and five statutory powers which you may use to carry out your duties. Failure to comply with your duties and use your powers honestly can have serious consequences, including personal liability for any losses, so it is important to understand what your duties and powers are.

    The duties of a trustee

    • Care and skill: You must use reasonable care and skill when managing the trust, taking into consideration your level of knowledge. Professional trustees are held to a higher standard.
    • Comply with the terms of the trust: Trustees must follow the provisions of the trust and not act outside the scope of their authority.
    • Honesty: You must act honestly in the best interests of the beneficiaries and not take advantage of or profit from any position of power you may have.
    • Avoid conflicts of interest: You must avoid any conflict between your personal interest and those of your role as trustee, ensuring you act in the best interests of the trust’s beneficiaries at all times.
    • Act impartially and in good faith: You must make decisions based on what is best for the beneficiaries, without favouring any one person or group over another.
    • Invest trust funds sensibly: Trustees have a duty to protect the trust’s funds and invest them in a way that is likely to give the greatest returns available within reasonable limits.
    • Keep accounts: You will need to keep accurate and up-to-date records of all financial transactions made on behalf of the trust and complete annual tax returns where required.
    • Seek professional advice: If necessary, you must seek out specialist advice to fulfil your duties competently.
    • Act unanimously: Decisions must be agreed upon by all trustees, with a few limited exceptions.

    The five statutory powers of trustees

    • Investment: Trustees have the power to invest the trust’s assets which they must balance against a duty to ensure investments are reasonably diversified to reduce risk and changed if necessary for the benefit of the beneficiaries.
    • Insurance: Trustees can arrange insurance cover for any assets held in trust or liabilities incurred by them as trustees.
    • Advancement: Under certain circumstances, trustees can advance money from the trust to a beneficiary, up to the whole of the beneficiary’s share.
    • Delegation: Trustees can delegate certain responsibilities and decisions to an appropriate person or body, such as a professional adviser.
    • Maintenance: For certain types of trusts, if a beneficiary is aged under 18 years, you are able to apply income from the trust towards the maintenance, education and benefit of the minor beneficiary. The rest is accumulated and added to the trust’s capital.

    Why is this important?

    If a trustee fails to discharge their duties, or oversteps the limits of their power, they may be held personally liable for any loss or damage suffered. The trustee may also be removed from their position. It is therefore important for trustees to understand their duties and powers and act with the proper standard of care when managing the trust.

    For more information or advice about your duties as a trustee, please contact us.

    Family Trusts

    Creating a lifetime trust, such as a family trust, can help ensure that your assets pass tax-efficiently to your loved ones, while protecting trust assets from assessment for residential care fees. We can help you plan ahead and preserve family wealth for the next generation.

    Find out more.

    Will Trusts

    Created by your will and taking effect on death, a will trust can be an effective way of passing wealth to your loved ones while avoiding unnecessary Inheritance Tax.

    Find out more.

    International Estate Planning

    If you are a foreign national living in Britain or have overseas interests that may be subject to taxation abroad as well as here, then your estate plan will need to take into account multiple jurisdictions. This adds more complexity but can also create opportunities for reducing your tax liabilities.

    Our international estate planning solicitors can assist you with effective strategies for structuring your global wealth. We can help you:

    • Move wealth between countries
    • Change your domicile for tax purposes
    • Set up trusts that are compliant with different sets of laws
    • Minimise the impact of double taxation
    • Transfer assets during your lifetime
    • Support family members around the world
    • Manage your intentional portfolio for the benefit of future generations

    It is not possible to achieve these benefits with a will alone. Wills, trusts and other wealth-management structures often work better when combined than individually.

    Inheritance Tax (IHT) is charged on death at 40% of the value of assets over a certain threshold, which at the moment is £325,000. If no reliefs were applied to an estate worth £1 million,  IHT of £270,000 would be due.

    The burden of IHT has increased significantly over the last decade because the threshold above which tax is charged  has not changed for over a decade unlike the value of UK property. However, there are exemptions and reliefs that provide opportunities to mitigate your exposure to tax. You could, for example:

    • Set up trusts that can hold assets outside of your estate and still pass them down to your children
    • Use your annual IHT exemption to give up to £3,000 away each year or £6,000 if you haven’t used the previous year’s allowance
    • Use your nil-rate band to transfer assets to a partner or spouse free of IHT
    • Make use of the agricultural and business property reliefs

    A professionally drawn estate plan, with proper tax advice, is the best way to reduce your IHT liability and ensure your interests are protected. Your solicitor will be happy to discuss your options in confidence.

    Lasting power of attorney

    A Lasting Power of Attorney is a legal document that allows someone to make decisions on your behalf should you become unable to do so yourself. You can give instructions on what should happen to your money, health or well-being in the event of old age, illness or injury that affects your mental capacity. While a will ensures your wishes are carried out after death, a Lasting Power of Attorney is created to protect your interests during your lifetime.

    Find more information on our lasting power of attorney FAQs page.

    Testimonials

    • "The team is first-class - knowledgeable, approachable and offers excellent value for money"

      Legal 500, 2020

    Trusts, tax & estate planning insights

    View all insights

    Need some more information? Make an enquiry below.

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