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Taxation of Trusts

2 Part Course  |  Learn the basics as well as understand the more complex taxation of trusts issues

Taxation of Trusts Training Course

A one-day course presented in two half-day live webinars

Video Overview

Click to watch a course overview
and meet your trainer.

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  • The trainer is a Chartered Accountant with over 30 years’ experience in Tax Training
  • Unlike most tax trainers, he has wide-ranging experience in lecturing in the financial services industry, including for many regulatory examinations
  • There are many numerical examples to aid understanding of potential tax exposure
  • Basic tax traps and planning areas are highlighted throughout, along with relevant cases

Part 1

At the end of Part 1 of the taxation of trusts course, participants will have an excellent working knowledge of:

  • The different types of trust, trust taxation, including private trust taxation, 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

At the end of Part 2 of the taxation of trusts course, participants will understand how tax issues can impact asset-holding strategies involving the UK and offshore 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
  • ‘Tax pool’ problems where discretionary trustees wish to distribute dividend income to beneficiaries
  • Use of revocable interest in possessions by discretionary trustees
  • Availability of business asset disposal relief to trustees
  • The tax advantages of ‘vulnerable beneficiary’ trusts
  • The tax charges arising on settlor-interested trusts
  • Trust strategies involving offshore bonds
    • Gift and loan trusts
    • Discounted gift trusts
  • Why investors may want to use offshore trusts
  • ‘Excluded property’ trusts
    • Why they are used in IHT planning by non-UK domiciled people
  • How income tax and CGT charges can arise on settlors or beneficiaries of offshore trusts

Part One

Legal background

  • What is a trust?
  • Role of the settlor and trustee
  • Overview of discretionary, interest in possession (IIP) and taxation of bare trusts, including why they are used
  • Key advantages of charitable trusts
  • The main provisions of the Trustee Act 2000
    • Trustees’ powers
      • Powers of investment
      • Appointment of agents
      • Policy statements

CGT of trusts (capital gains tax on 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 FA 2006 changes on the creation of trusts
  • ‘Qualifying’ IIP trusts
    • Definition
    • Appointment of assets to beneficiaries
      • On death
      • While the life tenant is alive
    • Taxation of Non-qualifying IIP trusts 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

Income Tax charges on trustees and beneficiaries

  • The different rules for income tax on trust, IIP and discretionary trust tax rates
  • 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

 

Part Two

CGT of Trusts

  • Business asset disposal relief – the availability to trustees
  • 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 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
    • How making distributions may increase the trustees’ tax charge
    • Use of revocable interests in possession

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
  • ‘Gift and loan’ trusts
    • What they are
    • How they are used in IHT planning
  • Discounted gift trusts
    • What they are
    • Why they are 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 interest in possession trust

Offshore Trusts

  • Excluded property trusts
  • Anti-avoidance that can add taxation of trust income or gains on UK settlors or beneficiaries

Our trainer is a Chartered Accountant who qualified with PwC in 1988, spending his last 18 months there in the Tax department. In 1989 he 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 courses for accountants, lawyers and investment managers.

 Our trainer has been teaching in the financial services industry since 1994. He has written a textbook on Tax and Trusts for the CII exams and writes regularly for Tax Insider.

Part 1 of this 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. The course will be of use to those who have limited experience with trust and those who need a refresher in this area. Differences between English and Scottish law will be covered where appropriate.

Part 2 of this course will build on delegates’ basic knowledge of UK tax and trusts by looking at more complex areas, including various scenarios where trusts can be used in tax planning. The course will contain some short case studies to demonstrate the practicalities involved, as well as several numerical examples.

Those without a good working knowledge of both trusts and UK tax should attend Part I of the course before attending 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 having 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 and so it was helpful to learn about events which may trigger a tax liability - we would usually instruct an account to prepare any returns. However, for planning purposes and general administration, issues such as VPEs & issuing R185's was really helpful to learn about as well as considerations to either selling assets within a trust or appropriating/ gifting them to a beneficiary.
Number of places:
Part 1
Number of places:
Part 2

£795.00

Per participant per part

Discounts available:

Book multiple places on both parts in one order for the below discounts:

  • 2+ places at 40% less = £954.00
    per person
  • 4+ places at 50% less = £795.00
    per person
  • 6+ places at 60% less = £636.00
    per person
  • 9+ places at 70% less = £477.00
    per person
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