IHT Trusts - Case Study
The People
Mr and Mrs K had three children and eight grandchildren. They wished to place £500,000 into trust during their lifetimes to pay for the senior school education of their grandchildren.
The Problem
If the full amount was put into one trust, Inheritance Tax of £35,000 would be payable immediately. In addition, when funds were paid out they could be subject to Inheritance Tax charges of up to 6% (£10,500).
The Solution
Mr and Mrs K each set up a trust in their individual names, so that only £250,000 was placed into each trust. As this was below the available Inheritance Tax nil rate band there was no Inheritance Tax payable up front and there would be no charges payable by the trust for at least the first 10 years.
Who to contact
Paul Tobias
Senior Partner, Head of Trusts & Investments
Email
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