Inheritance Tax: Beat the System with Trusts
Inheritance Tax (IHT) is a tax you gotta pay when you kick the bucket. It’s based on the value of your estate, which includes all your stuff like property, money, and investments.
The current IHT limit is £325,000, which means you don’t have to pay IHT on the first £325,000 of your estate. Anything above that gets smacked with a 40% tax bill. There are additional allowances which we can advise on.
If you’re worried about how much IHT your estate might owe, setting up a trust could be a good move. Trusts can help reduce IHT in a few ways: Get in touch with “Our Accountant” and find out how we can help.

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* Gifting to trusts: If you give assets to a trust more than 7 years before you die, they’re exempt from IHT.
* Securing assets: Stuff held in a trust doesn’t count towards your taxable estate, so it’s outta reach of IHT.
* Shielding income: The income from a trust doesn’t get taxed as part of your income (it is payable by Trust).
Types of trusts:
* Bare trusts: These are the simplest type. The trustee has a legal duty to hand over the assets to the beneficiary.
* Interest in possession trusts: The beneficiary gets to enjoy the income from the trust assets during their lifetime. The capital assets get passed on to another beneficiary after the beneficiary dies.
* Discretionary trusts: The trustee has a say in who gets the income and capital from the trust assets.
* Accumulation trusts: The trustee can pile up the income from the trust assets and add it to the capital. The capital assets get passed on to the beneficiary after a while.
Which type of trust is right for you?
The type of trust that’s best for you depends on your personal circumstances and goals. They can be complicated and requires expert advice and guidance.