Additions in exit charges in the first ten years in relevant property trusts

Relevant property trust calculations can be tricky. Entry charges exit charges and periodic charges are all required to be calculated but none are more complicated than the additions calculations. In accounting for additions to a settlement whether calculating either the exit charge or the periodic charge any additions up to the exit (or during the period leading to the ten-yearly charge) need to be considered separately to the original trust property. This is because the added property has not been in the settlement for the entire time the tax charge is being charged over.

The method employed for dealing with additions can sometimes be difficult to understand because although the trust property has clearly not been inside the settlement for the whole period it is included in its entirety in calculating the value of the trust for calculating the percentage which is to...