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UK Inheritance Tax

Trusts Taxation Advice and Planning in Wakefield

At Olive Tree Wealth Management Ltd, we provide expert advice on trusts taxation.

You can rely on our experienced professionals to guide you through trusts taxation, including capital gains tax on savings and inheritance tax in
 West Yorkshire, including Wakefield, Harrogate, York, Driffield, Knottingley, Malton, and Castleford. With our help, you can make informed decisions and take control of your financial future.

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Navigating Capital Gains and Inheritance Taxes

Capital Gains Tax On Savings

If you make a profit from selling an asset, like property or stocks, you may need to pay capital gains tax. We can help you understand and plan for this tax.

Inheritance Tax

Inheritance tax is a tax on money or property you leave behind when you die. We can help you plan so your loved ones aren't burdened with extra taxes.
 

The government levies tax on the value of a person’s estate if their estate is worth more than the Nil Rate Band. The IHT ‘Nil Rate Band’ (NRB) is currently £325,000 (2024/2025), and many people are still getting caught in the trap of property inheritance tax as the threshold has not kept pace with the inflation of property prices, and so is affecting more and more people.

There is also an additional 'main residence’ allowance (‘Property Nil Rate Band’ (PNRB), which applies if a person’s home is given to their children (including adopted, foster, or stepchildren), surviving husband or wife, or grandchildren. This is set at £175,000 (2024/2025) and is added to the IHT threshold, providing a total allowance of £500,000 (2024/2025).

When a relative dies and leaves an estate worth more than £325,000 (2024/2025) or £500,000 (2024/2025) if the 'main residence’ allowance applies, families are required to pay tax on the amount in excess of the NRB (and PNRB if applicable) within six months. After that, they are charged interest at a rate of 7.75% (2024/2025).

However, there are ways to lessen the burden of property IHT. When you die, it is likely that you will wish to leave as much as possible for your loved ones. Unfortunately, this is often not as simple as you might expect. HM Revenue and Customs (HMRC) will apply 40% tax to the value of your estate over and above that of the NRB (and PNRB) that applies at the time of death.

No IHT is applicable to ‘inter-spousal transfers’ (money, property, or assets) that are bequeathed by one spouse (or civil partner) to the other.

Your estate could include more than you originally realised. It is often easy to dismiss IHT as something that may not affect you, as your property may not be over, or much over, the IHT threshold. However, with all your other assets, such as investments, life cover, bank accounts, as well as physical property such as cars, furniture, and family heirlooms, many estates are considerably over the threshold without the individual being aware of it.

For assets passed between spouses and civil partners, the nil rate band allowance will pass along with the assets. This gives a couple available allowances (nil rate bands) of up to £650,000 (2024/2025), which increases to £1,000,000 (2024/2025) with the addition of the 'main residence’ allowance detailed above.

For further information about inheritance tax, please visit the government website.

The Financial Conduct Authority does not regulate Inheritance Tax Planning, Trusts or Tax Planning.

Expert Advice and Support with Olive Tree Wealth Management Ltd

When it comes to Trusts Taxation, there are various rules and laws to follow. It's important to plan ahead for the tax implications of trusts, so you can manage your tax liabilities and take advantage of any exemptions or deductions available.

Trusts also have reporting and compliance requirements, so it's essential to stay on top of these to avoid any penalties.

At Olive Tree Wealth Management Ltd, we can help you navigate the complexities of trusts tax planning and management. Our team can provide expert advice and support to ensure that you meet all your tax obligations while maximising your tax benefits.

 

With our help, you can have peace of mind knowing that your trusts taxation is in good hands.

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FAQ

What is a 'trustee'?

Trustees are the legal owners of the trust property. They are legally bound to look after the property of the trust in a particular way and for a particular purpose. Trustees administer the trust and in certain circumstances make decisions about how the property in trust is to be used.

What is property?

The property of a trust can include:
 

  1. Money

  2. Investments

  3. Land or buildings

  4. Other assets, such as paintings

The cash and investments held in the trust are also called the 'capital' or 'fund' of the trust. This capital (or fund) may produce income, such as interest or dividends. The land and buildings may produce rental income.

What is a 'beneficiary'?

A beneficiary is anyone who benefits from the property held in the trust. There can be one or more beneficiaries, such as a whole family or a class of people, and each may benefit from the trust in a different way.

For example, a beneficiary may benefit from:

  1. The income only, or

  2. The capital only, or

  3. Both the income and the capital of the trust

What is a 'settlor'?

A settlor is a person who has put property into trust. Property is normally put into the trust when it is created, but it can also be added at a later date.

Is a settlement the same as a trust?

The words 'settlement' and 'trust' are sometimes used in place of each other, and to describe the same thing. For tax purposes, the term 'settlement' can have a wider meaning and can include various other arrangements and agreements.

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Ready to ease the burden of trusts taxation?

We understand the complexities and potential pitfalls of trusts taxation. Don't let it weigh you down - contact us today to see how we can help. 

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