The following Trusts and Inheritance Tax guidance note by Tolley in association with Peter Gausden, Consultant Solicitor at Rowlinsons provides comprehensive and up to date tax information covering:
If a will creates a discretionary trust (ie ‘relevant property’ trust) and within two years of death there is a distribution (or other event) which would otherwise have given rise to an exit charge because the property ceases to be relevant property, then:
IHTA 1984, s 144
The relief gives a testator the opportunity to postpone decisions about how the estate is to be distributed by leaving it on discretionary trust. The executors / trustees can decide on the most appropriate distribution after the testator has died, without incurring exit charges because the assets have passed through a relevant property trust.
A discretionary will trust may be used to maximise reliefs and exemptions on death, depending on the circumstances arising at the time. Typical tax saving measures include:
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