There’s a lot of information out in the media about Family Trusts and what they can do. Alot of media says Family Trusts are complicated and really should be avoided. But if the circumstances are right, a Family Trust can save you and your family an awful lot of tax.
Inheritance tax doesn’t kick in these days for a married couple until over nine hundred thousand pounds. But quite often with death in service benefits being a multiple of a breadwinner’s salary, you can find that huge lump sums of money fall into a state when a breadwinner dies. If that’s the case, you could suddenly find yourself paying 40 percent tax on those assets. So if you’ve got a house worth around a half a million pounds and you’re on maybe one hundred thousand pounds a year and you have a five times salary benefit on death (which is not unusual) you’ve suddenly got yourself a £40,000 tax bill you didn’t really need to have.
Family Trusts can organise your affairs so that the family can benefit from that death in service benefit without paying any tax. Family Trusts can also be used to pass properties to children, and can also be used where you’ve got disabled children.
If you’ve got a disabled child, a Trust is really, really important to make sure that any assets that pass to them are not taken by the local authority to pay for their care or to disrupt their care package. Family Trusts are an interesting but complex subject, if a Family Trust might suit your circumstances, say you want to pass assets to children, if you want to mitigate tax on benefits from work, or if you want to make sure your disabled children are looked after, give us a call and find out more.