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Why do I want a Trust?
In the current climate you may wonder why it is still appropriate to consider preparing a Trust. In recent times the compliance associated with trusts has become even more burdensome.
Previously Trustees have had to contend with the introduction of FATCA (Financial Account Tax Compliance Act) which was introduced following an Inter Governmental Agreement between the US and the UK.
In 2017 HMRC introduced the Trust Registration Service, requiring Trustees, or their agents, to provide much more information to HMRC than had previously been the case. This will be an ongoing requirement and supposedly is designed to help HMRC move towards the digital age.
The other area that has added to the compliance burden is the requirement for trusts to obtain LEI’s (Legal Entity Identifiers) in order that they can trade investments and securities.
All of these complexities make one question whether there is still a place for the creation of trusts moving forward. Thankfully, I am pleased to say, there is still a real demand for trusts to be prepared. Creating a trust is not just about tax planning, as governments may have you believe, but it is about providing protection to the family wealth that has been created. Trusts have many purposes, which do include tax planning, but not necessarily in a way that is aggressive or contentious. Often the reason is because of the concerns that younger or vulnerable beneficiaries are unable to look after such wealth themselves and the trust structure provides the mechanism to do that.
Despite the compliance headache that now goes with creating and administering trusts I believe they still have a very valuable role to play today, and long may they continue so to do.
For advice on trusts or any other area of Private Client law, please contact Richard Horwood.
Please note the contents of this blog are given for information only and must not be relied upon. Legal advice should always be sought in relation to specific circumstances.