In the March 2011 Issue of Property Investor News
Tax & Planning
Some readers may have seen the recent BBC programme called 'You can't take it with you'. The programme features a range of scenarios which enabled asset-owners to pass on wealth to loved ones tax-efficiently. For property investors, capital gains tax is often a major issue when passing on assets before death.
What is a trust?
A trust is a legal arrangement whereby 'trustees' are made legally responsible for assets (e.g. property, cash etc) held in trust for the benefit of 'beneficiaries.'
Trustees manage the trust and carrying out the wishes of the person who has put the assets into trust (the 'settlor'). The settlor's wishes for the trust are usually written in their will or given in a 'trust deed'.
Why use a trust?
Trusts are most commonly established to pass on assets and cash to loved ones. Assets may be placed in a trust on death (a 'will trust'), or during one's lifetime. The trust capital may produce an income, such as rental profits, and assets may be sold - as such, trusts pay income tax and capital gains tax.
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