The benefit of this is that the assets are then not legally assets of the beneficiaries and as such are not attackable from claims on the beneficiaries. These could range from divorce proceedings, creditors, long-term care fees and in some cases, Inheritance Tax.

Similarly assets settled in a Trust would not impact the entitlement to a beneficiary’s Social Benefits.

The use of Trusts can be a means of ensuring that an intended inheritance can be appropriately managed and protected for a ‘vulnerable’ beneficiary. Guidance can be given to the Trustees as to the specific intentions for such beneficiaries.

A Trust can be established by almost anyone over the age of 18. It is created by the ‘Settlor’ settling assets to the Trustees. This initially can be a nominal amount such as £10. Ultimately, further assets can be settled to the Trustees at any time either during the client’s lifetime or on their death.

Trusts and Tax Reduction

• Assets assigned to Trust can potentially reduce the tax payable.
• Trusts are also subject to tax, but appropriate management by       the Trustees can reduce any amount due substantially.
• Trusts can significantly reduce the impact of tax on future generations.

There are four types of tax which could affect you and your estate...
Corporation Tax
Corporation tax is paid by limited companies on their profits.

Corporation tax is not payable by the selfemployed but does apply to the following organisations, even if they are not limited companies:

• Members' clubs, societies and associations.
• Trade associations.
• Housing associations.
• Groups of individuals carrying on a business but not as a partnership, eg co-operatives.
Capital Gains Tax
CGT is a tax on capital ‘gains’. If when you sell or give away an asset it has increased in value, you may be taxable on the ‘gain’ (profit). This doesn’t apply when you sell personal belongings worth £6,000 or less or in most cases, your main home.

You may have to pay CGT if you:
• Sell, give away, exchange or otherwise dispose of (cease to own) an asset or part of an asset.
• Receive money from an asset - for example compensation for a damaged asset.
Inheritance Tax
This is a tax on the value of a person’s estate on death and on certain gifts made by an individual during their lifetime.

Broadly speaking your estate is everything you own at the time of your death, less what you owe. It’s also sometimes payable on assets you may have given away during your lifetime.

Assets include things like property, possessions, money and investments.
Income Tax
Income Tax is a tax on income. Not all income is taxable - and you’re only taxed on ‘taxable income’ above a certain level. Even then, there are other reliefs and allowances that can reduce your Income Tax bill - and in some cases mean you have no tax to pay.

Taxable income includes:
• Earnings from employment
• Earnings from self-employment
• Most pensions income (State, company and personal pensions)
• Interest on most savings
• Income from shares (Dividends)
• Rental income
• Income paid to you from a trust
So whether you own your own business and your concern is Corporation Tax, own property or hold other forms of assets which would fall prey to Capital Gains Tax, or believe Inheritance Tax will become an issue for your intended beneficiaries; Rafter Wills and Estate Planning can provide you with the correct type of tax planning to ensure as much tax as possible is saved.

We are experts in providing advice on all aspects of tax planning and with the use of Trusts, will provide these ultimate tax savings.
For more information and to download an information pack, please visit our Media page.
What is a Trust?
A common definition for a Trust is ‘a legal obligation where one or more “Trustees” are legally responsible for managing the Trust assets on behalf of the beneficiaries’.

Fundamentally, a Trust is used by someone who wants persons (Trustees) to manage their assets which they originally owned, for other persons (beneficiaries).
Contact us now to arrange a free initial meeting:
Telephone: 01604 889073