The following Trusts and Inheritance Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
In some circumstances, it might be desirable to partition a trust, that is to break the trust by dividing up the assets between the beneficiaries. The term partition is usually applied to a division of assets between the life tenant and the remaindermen beneficiaries (thus bringing the trust to an end). It can also refer to splitting a trust into separate funds, which then operate independently under new trusts (and may have different beneficiaries and trustees).
Although there is some overlap between ‘partition’ and ‘resettlement’, the latter more often refers to a re-organisation within the trustees’ existing powers, whereas partition requires approval by the beneficiaries. See the Resettlements and variations guidance note.
Reasons for partition might include:
the expiry of the rationale for the trust
specific beneficiary needs
a desire to reduce trust administration costs, or
a breakdown in relations between the beneficiaries
Where the beneficiaries wish to bring the trust to an end by mutual agreement, whether or not the trustees agree, this can usually be achieved under the rule in Saunders v Vautier, provided certain criteria can be met.
Trustees of trusts of land can also bring about a similar outcome between co-owners of the entire beneficial interest in the property that is subject to the trust of land, provided they all consent. This is under the Trusts of Land and Appointment of Trustees Act 1996.
Whilst originally serving as authority for beneficiaries to stop accumulations of income, the case of Saunders v Vautier has developed well beyond th
**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
‘Bed and breakfasting’ was the pre-1998 practice of selling shares and repurchasing them the following day. This technique can still be used in a modified form to achieve capital gains tax (CGT) savings for current or future tax years using:•a spouse / civil partner•a self-invested pension plan
What is quick succession relief?Quick succession relief (QSR) reduces the tax payable when the same property has been subject to more than one charge to IHT. It applies where there have been two chargeable transfers on which tax is payable within a period of five years.Although commonly called QSR,
Following Spring Budget 2020, statutory sick pay (SSP) rules were changed temporarily to help workers affected by the coronavirus (COVID-19) outbreak. The Chancellor confirmed the Prime Minister’s previous announcement that SSP will be paid from day 1 rather than day 4. Updated guidance on the
This guidance note covers measures in place to allow taxpayers to defer VAT payments as a result of pressures faced due to the coronavirus pandemic.For an overview of the impact of coronavirus on VAT more broadly, see the Coronavirus (COVID-19) and VAT ― overview guidance note.See also the CIOT