Tax issues for transfers in and out of UK trusts

Whisper it quietly but trusts are relatively simple things when they are boiled down to the fundamentals and we are not distracted or confused by the ‘legal speak’ in which they are wrapped up.

People (settlors) put things (assets) into a ‘large cardboard box’ to be kept safe and accessed at a later date (a trust). The trustees look after the box for a while and in the meantime the assets in the box generate income and grow in value. Then on the principle that everything that goes in the box must eventually come out again when the time is right (or when they are obliged to under the rules of the trust) the trustees will take those assets out of the box and give them to the people (beneficiaries) for whom the trust was set up in the first place.

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