Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

Trust trouble

21 February 2012
Issue: 4342 / Categories: Forum & Feedback , Trusts
An unmarried client wishes to establish a trust for the benefit of his domestic partner after his death, although the trust fund will revert to the settlor in the event of the partner’s earlier death

My unmarried client wishes to minimise the inheritance tax liability arising on his death and proposes to transfer into a trust of which he will be the sole trustee £325 000 now and the relevant nil-rate band amount every seven years thereafter.

The trust will be for the benefit of his domestic partner who will have no right to any enjoyment of the trust fund until the death of my client whereupon she will become absolutely entitled to the whole of the property and its accumulated income.

In the event of her predeceasing him the trust property and its accumulated income will revert to him.

My client is aware of the ten-year anniversary charge but I am wondering if the value subject to that charge could be nil or reduced being an interest that is either reversionary (i.e. future contingent) and therefore excluded property...

If you or your firm subscribes to Taxation.co.uk, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.

back to top icon