Pearson Hinchliffe Solicitors - Professional Understanding - Advising - Supporting - Delivering

Trusts and Wills Hit by 28pc CGT Rate

The new Capital Gains Tax rate of 28% will not just affect higher rate tax payers but anyone earning enough to pay more than the basic rate of income tax and will also apply to all Trusts and estates, the Law Society has advised. 

Eroding Trusts Assets

All gains made while an estate is being administered and all gains made by a Trust will be charged to tax at 28%, rather than the old rate of 18%. This, when combined with income tax 50 per cent, puts Trust assets in danger of being seriously eroded.

This will affect parents who want to protect their young children by leaving monies in their will on trust for their children until they are old enough to manage their own finances.

Law Society President Robert Heslett advises anyone who may be affected to seek advice from their solicitor to ensure that arrangements are as tax efficient as possible.

Use a Solicitor for Trusts

“This reinforces the importance of using a solicitor instead of an unqualified, unregulated will writer for trust or probate matters ...Even where a solicitor has not been appointed to administer a trust or estate, anyone who has been given that role should go to a solicitor, who is best placed to take all these issues into account.”

My Heslett added, “Many hardworking families will often look to create a protective tax regime for their children in the event that they are orphaned at a young age by leaving assets in trust until the children are old enough to manage the assets without the guiding hand of their parents.

“There is a real danger of trust assets being eroded through a combination of income tax at 50 per cent, CGT at 28 per cent and the impact of the changes to the inheritance regime introduced in 2006."

For more information on Trusts, Wills and your tax situation or to contact a specialist Private Client solicitor, please use the details provided below.