The following Trusts and Inheritance Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
The special category of Age 18–25 trusts was introduced by FA 2006 to offer some compensation for the loss of old style accumulation and maintenance (A&M) trusts. The A&M regime offered exemption from IHT charges on trusts in favour of children and young adults up to the age of 25. The conditions were fairly narrow and precise but nevertheless enabled any settlor, both in lifetime and on death, to make provision for young people. See the Accumulation and maintenance trusts guidance note. After FA 2006:
The Age 18–25 provisions extend both of these categories to retain some concessions for beneficiaries up to the age of 25.
Where property is held in a trust which qualifies as an Age 18–25 trust, there is no inheritance tax charge whilst the beneficiary is under the age of 18 as result of the following events:
IHTA 1984, s 71E(2)
After the beneficiary reaches the age of 18, an inheritance tax exit charge will arise as a result of those events. The charge is calculated with reference to the length of time the property has remained settled after the age of 18. The maximum chargeable period is therefore seven years. The calculation of the charge, which is described below,
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
To view our latest tax guidance content, sign in to Tolley Guidance or register for a free trial.