Why do people use trusts

By Tolley in association with Emma Haley at Boodle Hatfield LLP
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The following Trusts and Inheritance Tax guidance note by Tolley in association with Emma Haley at Boodle Hatfield LLP provides comprehensive and up to date tax information covering:

  • Why do people use trusts
  • Control
  • Protection
  • Flexibility
  • Tax considerations

Trusts have a long history of use as a means for people to protect their assets and to control their management as well as how those assets are transferred to others. The elements of protection and control are key to understanding the reasons why people use trusts. Flexibility is also an important factor. Finally, tax issues may influence the use of a trust. A trust is a more costly and complex way of passing on property than an outright gift and so will only be used where there are benefits over and above an outright gift.

This note explains some of the general reasons for using trusts both during lifetime and on death.

Control

A trust exists where someone (a trustee) holds assets for

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