Clarity needed on multiple trusts
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Clarity needed on multiple trusts

11/12/2014

The new draft proposals issued as part of the Draft Finance Bill appear to still allow opportunities for use of multiple trusts, providing additional property is not added on the same day. 

The Rysaffe principle is where multiple trusts are set up on different days so that each trust can benefit from its own nil rate IHT band of £325,000. If each trust is less than £325,000 then there is no IHT to pay, something which the Government has indicated it wants to crack down on.

In the Autumn Statement the Government performed a u-turn on their previous plan to implement a single settlement nil rate band. The Government implied it still believed in the principles behind the proposed legislation, but believed there would be a better way of implementing it. However, draft legislation issued yesterday as part of the Draft Finance Bill appears to provide opportunities for further multiple settlements to be established where additional property is added on different days. The proposals do however introduce new measures when property is added to multiple settlements on the same day, to ensure the value of all the settlements are be taken into account for both periodic and exit charge calculations.

It is not clear how these new proposals will impact existing trust arrangements.

There will now be a three month consultation period with the industry.

Rachael Griffin, head of technical marketing, Old Mutual Wealth: 

“More clarity on the new proposals is required to prevent advisers and clients facing a period of uncertainty. It is unlikely the Government has changed its mind on clamping down on the Rysaffe practice, and it could be that additional changes are introduced further down the line. In the meantime, advisers should continue to assume existing trusts are ring-fenced under the old rules and, to be safe, not add further property to them until there is clarity”.

FOR MORE INFORMATION CONTACT:

Sophie LentonOld Mutual Wealth023 8091 677007834 499 558

Notes to editors:

About Quilter plc:

Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

Quilter plc oversees £116.5 billion in customer investments (as at 30 June 2018).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions and discretionary fund management.

The business is comprised of two segments: Wealth Platforms and Advice and Wealth Management.

Wealth Platforms includes the Old Mutual Wealth UK Platform; Old Mutual International, including AAM Advisory in Singapore; and the Old Mutual Wealth Heritage life assurance business.

Advice and Wealth Management encompasses the financial planning network, Intrinsic; Old Mutual Wealth Private Client Advisers; discretionary fund management business, Quilter Cheviot; and the Multi-asset investment solutions business.

The Quilter plc businesses are being re-branded to Quilter over a period of approximately two years:

• The Multi-asset business is now Quilter Investors

• Intrinsic to Quilter Financial Planning

• Private Client Advisers to Quilter Private Client Advisers

• The UK Platform to Quilter Wealth Solutions

• The International business to Quilter International

• The Heritage life assurance business to Quilter Life Assurance

• Quilter Cheviot will retain its name

This press release is for journalists only and should not be relied upon by financial advisers or customers.

Please remember that past performance is not a guide to future performance. The value of investments and the income from them can go down as well as up and investors may not get back any of the amount originally invested. Exchange rate changes may cause the value of overseas investments to rise or fall.

This communication is issued by Quilter plc.  Registered office: Millennium Bridge House, 2 Lambeth Hill, London EC4V 4AJ, United Kingdom. Registered number: 6404270.  Registered in England.