Contents
The year ahead...
Anything to declare?
Top-up savings
Family fortunes
CGT rates down
Where there's a will
Family bonus
Splitting gains
Standard VAT or flat VAT?
Too much NIC
Time to incorporate?
His and hers
Credits and debits
Piggy banks
Give and save
Penalty shoot-out
Paperwork, paperwork
NIC and pensions
VAT's up (or down)?
Profit and loss
Company cars
Place in the country
This year, next year
Pay tax later
Interesting times
Show me the money
Tax-free benefits
Rainy day money
Still trustworthy?
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Trusts may be set up for tax reasons or for other reasons - but the tax rules are important either way. Trusts pay the same tax rates on both income and gains as individual taxpayers. In some cases, a trust will pay higher rate tax, even if the beneficiaries are all lower rate taxpayers. Trustees need to consider whether there is anything they can do to mitigate the higher liabilities. If a trust has a "vulnerable beneficiary" - a disabled person, or a child under 18 one or both of whose parents have died - it's very likely that the beneficiary will have unused allowances and lower rates. The rules allow the trustees to take advantage of the beneficiary's tax reliefs, but the rules are complicated, and professional advice is likely to be needed. In 2006, Gordon Brown introduced some very controversial changes to the inheritance tax treatment of trusts. These were presented as a way of stopping rich people avoiding IHT, but trusts are a very common device to protect young people from the dangers of having access to too much money too early, and the effects of the changes may be to increase that risk. Anyone whose Will includes a trust, or who has established a trust already, should take advice on the IHT impact of the new rules if they have not already done so. It may be better to leave the trust in place and suffer the tax, but it will be important to understand what the liabilities are.
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