Malcolm Finney outlines a variety of trusts and some of their tax implications.
Settlements (more commonly referred to as ‘trusts’) are widely used in tax and general family planning. In many cases, they offer flexibility and also tax efficiency.
There is no universal definition of the term ‘settlement’ for all tax purposes. For inheritance tax (IHT) purposes, IHTA 1984, s. 43(2) defines this term. Very broadly, it extends to any disposition of property, where the property is held in trust for persons in succession.
Pre-22 March 2006 vs post-21 March 2006 settlements
Major changes were introduced, effective from 22 March 2006 to the IHT treatment of trusts and their classification. Transfers into trusts set up inter vivos prior to this date
