The following Private Client guidance note Produced in partnership with Alexander Erskine of Taylor Wessing LLP provides comprehensive and up to date legal information covering:
FORTHCOMING CHANGE: As originally announced at Autumn Budget 2017 and followed up by written statement after Spring Statement 2018, plus an announcement in Budget 2018, the government ran a consultation on the taxation of trusts from 7 November 2018 to 28 February 2019, inviting views on the principles of transparency, fairness and simplicity that it believes should underpin the taxation of trusts. See also the research exploring the use of trusts which was also published on 7 November 2018. See News Analysis: Exploring the consultation and review on the taxation of trusts.
This Practice Note has been written to be read alongside:
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For an introduction to the relevant property regime for trusts, see Practice Notes: Trusts—inheritance tax—overview and The meaning of relevant property.
The charge to inheritance tax (IHT) on relevant property arises on two occasions:
the periodic ten-year anniversary of the settlement's creation (the principal (ten-year) charge), and
when property (or value) ceases to be relevant property other than on excepted occasions (the exit charge)
For further guidance on the exit charge as it applied prior to 18 November 2015, see Practice Note: Relevant property trusts—the exit charge before 18 November 2015.
This Practice Note covers the calculation of the exit charge on relevant property on or after 18 November 2015 in further detail.
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