The following Trusts and Inheritance Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
Finance Act 2013 introduced harmonising amendments to all the qualifying conditions for trusts for disabled persons and other vulnerable beneficiaries. See the Disabled and vulnerable beneficiary trusts ― uniform definitions guidance note. Prior to the FA 2013 changes, it was a confusing trail through the tangle of CGT concessions aimed at trusts for vulnerable people. Not only did they conflict with the concessions for other taxes, the provisions for capital gains tax were not consistent. The new rules in Finance Act 2013 attempt to apply uniform conditions for all special provisions for disabled and vulnerable beneficiary trusts with effect from 2013/14. Finance Act 2014 made further adjustments.
However, where the new rules have become more restrictive, trusts already in existence, or included in a Will drafted before 8 April 2013, and satisfying the old conditions, will continue to qualify under the old conditions. The change to more restrictive qualifying conditions relates principally to the application of capital within the trust. Under old rules, trusts qualified for the disabled person’s concessions for annual exemption and hold-over relief if at least half of the capital applied was applied for the benefit of a disabled person. Under the new rules, all of the capital applied (except for a small annual limit) is to be so applied.
This guidance note deals with each special CGT provision for trusts with a vulnerable beneficiary and, where applicable, explains the position before and after the changes introduced by Finance Act 2013 and Finance Act 2014. Note that some provisions apply only to trusts for a disabled person, and do not cover the other category of vulnerable beneficiary, a young person under the age of 18, one of whose parents has died.
The CGT annual exemption for trusts is one half of the personal annual exemption. Where a settlor has created more than one trust, the trust annual exemption is shared between them, subject to a minimum annual exemption equivalent to one tenth of
**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
‘Hold-over’ relief allows for the deferral of a gain that would otherwise arise in relation to a disposal. No capital gains tax (CGT) is due in respect of the disposal, but the base cost of the asset for the transferee for the purpose of a future disposal is reduced by an amount equal to the gain
This note offers guidance in respect of the administration of company tax returns. If a company or organisation is subject to corporation tax they will have to complete and file a company tax return for each accounting period. A company or organisation must, in the main, file a return even if they
Why is this important?Tax-free amountEach individual, whether or not they are resident in the UK, is entitled to an annual exempt amount when calculating the taxable amount of their chargeable gains for the tax year (although see the exceptions below). The annual exempt amount is also known as the
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.