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:
The main consideration for a client who wants to provide for children in his Will is to decide the age at which they should inherit, and whether they are to inherit outright or whether their inheritance should be held in trust. This will boil down to personal preference, although clients will need some steering through the different tax consequences of the various options. Reference should be made to the practice notes elsewhere in this guidance note for a detailed discussion of the tax aspects relevant to each of the options mentioned below.
These are usually more suitable for adult children. Inheritance tax may be payable on the client’s death and then the property becomes held in the children’s own estates for inheritance tax purposes. The possibilities of a future divorce, bankruptcy or a child’s profligacy are common reasons for avoiding an outright gift ― see ‘Trust options’ below.
For younger children, clients invariably want some sort of trust.
Two types of trust which receive special inheritance tax treatment are provided for the client’s own children (including step-children):
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