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Should I put these properties into a trust?

Question:
I have 4 properties and want to know the best way to safeguard them for my children if i got married and then divorced or when I die. Should i put them into trust, and if so, what type?

Arthur Weller Replies:
This is more of a legal question e.g. whether pre-nuptial agreements are effective or not. From a tax perspective, trusts are not so tax-efficient. Most likely there will be capital gains tax (and possibly inheritance tax) on putting the properties into the trust. When in the trust, the rate of income tax on the rental income is most likely to be higher than if the properties were in personal ownership. And then there is going to be inheritance tax in the form of the ‘ten yearly charge’ and the ‘exit charge’. I would suggest looking around for another, legally effective, alternative that does not involve trusts.
I have 4 properties and want to know the best way to safeguard them for my children if i got married and then divorced or when I die. Should i put them into trust, and if so, what type?

Arthur Weller Replies:<>
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This question was first printed in Tax Insider in April 2012.