Taxation of Trusts

Name: Taxation of Trusts - Part 1
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2 Part Course | Learn the basics and master the more complex issues.

Magnificent architecture featuring a sweeping arched ceiling

Live virtual class | Delivered over two half-day sessions | 7 CPD hours

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In-house pricing available – often more cost-effective for teams of 10+

Download: Course Outline

Develop a clear understanding of different types of trusts and their income tax, capital gains tax and inheritance tax rules
Strengthen your ability to identify and manage key tax issues affecting trusts, including restriction on trustee residential landlords’ finance costs and investment bonds held in trust
Improve your knowledge of how trusts are used in tax planning, including pilot trust structures, revocable interests in possessions and ‘gift and loan’ trusts

Part 1 - The Basics

Legal Background

This Taxation of Trusts course covers the following from a legal perspective:

What is a trust?
The role of the settlor and trustee
Overview of discretionary, interest in possession (IIP) and bare trusts, including why they are used
Key advantages of charitable trusts

CGT of Trusts

Tax charges on creation
Disposals by trustees to beneficiaries or third parties
Importance of holdover relief
Clogged losses

Inheritance Tax of Trusts

The impact of the Finance Act (FA) 2006 changes on the creation of trusts
‘Qualifying’ IIP trusts are included in trust taxation courses:

Definition
Appointment of assets to beneficiaries:

On death
While the life tenant is alive

Non-qualifying IIP and discretionary trusts:

Appointment of assets to beneficiaries:

Exit charges and 10-year charges (overview only)

IHT-efficient trusts for children:

Trust for a Bereaved Minor
18-25 trusts

Form IHT 100 reporting

Income Tax Charges on Trustees and Beneficiaries

Investigate the different rules and tax rates for IIP and discretionary trusts
Importance of the R185 form
Availability of personal savings allowance, etc.
‘Tax pool’ issues for discretionary trustees:

How making distributions may increase the trustees’ tax charge

New rules for low-income trusts from 2024/25
Impact of increasing tax rates for dividends (2026/27) and savings and property income (2027/28)
Mandated trust income

Part 2 - Understanding More Complex Issues

CGT of Trusts

Part 2 of this taxation of trusts course considers using lifetime trusts to defer CGT charges:
- Case study on the CGT when winding up a trust

Inheritance Tax of Trusts

Transferable nil rate band (NRB) and impact on Will trusts
Impact of trusts on the availability of Residence NRB
‘Pilot trust’ structures:

What they are
F(No.2)A 2015 changes to the tax rules

Income Tax charges on Trustees and Beneficiaries

‘Tax pool’ issues for discretionary trustees:

Use of revocable interests in possession

Trustee residential landlords:

The different rules on the restriction of finance costs for IIP and discretionary trusts
The impact of an increase in property income tax rates from 2027/28 is covered in estate and trust tax courses

Other Trusts

Trusts for vulnerable beneficiaries
Settlor-interested trusts

Investment Bonds Held in Trust

Brief overview of investment bonds:
- Why invest in them?
- Tax rates applying
Who is liable for any tax charge on bonds held in trust?
- Settlor, trustees, beneficiary or no one, depending on circumstances
‘Gift and loan’ trusts:
- What they are
- How they are used in IHT planning
Discounted gift trusts:
- What they are
- Why are they less useful than in the past for IHT planning?
Practical problems and tax traps:
- Case study on the appropriateness of an investment bond for trustees of an IIP trust concludes Redcliffe's courses on trusts

This taxation of trusts course at Redcliffe Training is led by a Chartered Accountant who qualified with PwC in 1988 and spent 18 months in the firm’s tax department. In 1989, our specialist joined a leading financial training company as a tax tutor.

Since 1992, he has been self-employed as a Professional Tutor and Training Consultant, specialising in tax update training for accountants, lawyers and investment managers. This trainer brings extensive knowledge to our courses on trusts, given his extensive career.

This expert has been teaching in the financial services industry since 1994. Writing regularly for Tax Insider and speaking at conferences for bodies such as the ICAEW and CIOT, he brings much knowledge and experience to our sessions.

On completion of Part 1, participants attending trust taxation courses at Redcliffe Training will have developed a sound working knowledge of:

The different types of trust and the reasons for creating them
Technical terminology
Powers and duties of trustees, including:
- Appointment of agents by trustees
- Trustees’ investment powers
The CGT position when assets enter or leave a trust
The Inheritance Tax position when assets enter or leave a trust
The Income Tax position of trustees
The Income Tax position of beneficiaries receiving income

Part 2 develops participants’ understanding of how tax issues affect asset-holding strategies involving UK trusts, including:

How Will trusts holding assets can still be useful in the era of transferable nil rate band
‘Pilot trust’ structures and why they are now less effective
Using trusts to mitigate CGT charges
Income tax issues for trustee residential landlords
Use of revocable interest in possessions by discretionary trustees
The tax advantages of ‘vulnerable beneficiary’ trusts
The tax charges arising on settlor-interested trusts
This taxation of trusts course covers strategies involving investment bonds:
- Gift and loan trusts
- Discounted gift trusts

Part 1 of Redcliffe's trust taxation courses is suitable for accountants, lawyers, and wealth managers who encounter trusts in practice and want to learn more about the key tax and practical issues associated with them. Sessions assume no prior knowledge of the topic.
Part 2 builds on the foundations established in Part 1, exploring a range of issues with a particular focus on practical applications and planning considerations. Suitable for those with a good working knowledge of trusts and tax who are seeking a refresher and update, as well as delegates who have attended Part 1, this programme provides a natural next step for those looking to develop their expertise through more advanced courses on trusts.

Part 1 of this Taxation of Trusts course introduces delegates to the main types of UK trusts and their associated tax issues. No previous knowledge of trusts or UK tax is necessary. Training will benefit those with limited experience and those requiring a refresher in this area. The differences between English and Scottish law are covered in sessions where appropriate.

Part 2 builds on the delegates' basic knowledge of UK tax and trusts by investigating more complex areas. This includes various scenarios where trusts can be used in tax planning.

Estate and trust tax courses include short case studies to demonstrate the practicalities involved alongside numerical examples.

Those without a good working knowledge of both trusts and UK tax should attend Part 1 of the course before Part 2.

Well-spoken and easy to follow. Kept on topic and easy to understand.
The Trainer described each section of the course with the help of slides. It was good to have examples included.
The instructor was well-versed and was able to articulate complicated points effectively and simply. I enjoyed that the course was split over 2 days.
We deal with the administration of trusts, so it was helpful to learn about events which may trigger a tax liability - we would usually instruct an accountant to prepare any returns. However, for planning purposes and general administration, issues such as VPEs & issuing R185S were really helpful to learn about, as well as considerations to either selling assets within a trust or appropriating/ gifting them to a beneficiary.
The highlight of the course was listening to the trainer. I have attended his lectures in the past. I always learn something new from the trainer, so thank you. I have quite a few trusted clients, so the trainer's wonderful lecture will help me tremendously. Please pass on my sincere thanks to the trainer for guiding us all through this tricky subject matter.
Very good course. It was most helpful, thank you.
We are getting an increasing number of Trust queries, and this will help me to respond with confidence and certainty. I particularly liked the format, which set itself apart from the usual webinar format.

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