The following Trusts and Inheritance Tax guidance note Produced 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:
existing A&M trusts could retain their IHT privileges only if beneficiaries became absolutely entitled to trust assets by the age of 18
new A&M style trusts could only be created for a child under 18 whose parent had died ― see the Trusts for bereaved minors guidance note
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:
the beneficiary becoming absolutely entitled to the trust property
the death of the beneficiary
the trust property being paid or applied for the benefit of the beneficiary
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, is based on the standard method for relevant property exit charges.
However, the legislation specifically states that Age 18–25 trusts are not relevant property. Consequently, the principal or 10-year charge does not apply.
The conditions for an
**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
From 6 April 2015, an individual can elect to transfer 10% of the personal allowance (£1,250 in 2020/21 and 2019/20) to the spouse or civil partner where neither party is a higher rate or additional rate taxpayer. The legislation calls this the ‘transferable tax allowance’ but the GOV.UK website
IntroductionUK resident individuals who are non-UK domiciled can benefit from the remittance basis of taxation. The remittance basis allows for relief from UK taxation for non-UK sources of income which are not brought in (or remitted) to the UK. A remittance is any money or other property which is,
Class 1 and Class 1AClass 1 and Class 1A are the categories of NIC that can be charged on expenses reimbursed and benefits provided to employees. These classes are mutually exclusive. A benefit cannot be subject to both Class 1 and Class 1A NIC. Three requirements must be met before Class 1A NIC is
Business asset disposal relief (previously known as entrepreneurs’ relief) is a capital gains tax (CGT) relief that allows business owners with chargeable gains on qualifying business assets to pay CGT at a rate of 10%. For disposals made on or after 11 March 2020, the relief is available on up to
To view our latest tax guidance content, sign in to Tolley Guidance or register for a free trial.