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Readers’ forum: Tax concerns on trust payments for school fees

31 May 2022
Issue: 4842 / Categories: Forum & Feedback
School fees

One of our clients has been approached with a tax planning idea which involves them gifting some shares that they hold in their family trading company into a trust set up for their grandchildren.

We understand that the conditions for capital gains tax holdover would be met and so no capital gain would be triggered on the gift.

We also understand the idea that dividends that could then be paid on the shares would effectively be taxed on the grandchildren. However because they are all minors with personal allowances available to them tax reclaims could be made and the funds within the trust used to pay private school fees.

We have been advised that for this tax planning idea to work the school fees would have to be invoiced to the trust and not the parents. We have however read commentary that school fees...

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