Government u-turn on single settlement nil rate band on trusts
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Government u-turn on single settlement nil rate band on trusts

03/12/2014

The Autumn Statement has confirmed the single settlement nil rate band on trust will NOT come into effect in April 2015, following consultation responses.

One of the goals of the proposed rules was to prevent multiple trusts being set up on different days, each with its own nil rate band below the £325,000 inheritance tax (IHT) limit. This strategy has proved popular with many advisers and clients over the years, as the tax savings were potentially significant. The Government will still target this activity but will look for alternative ways of achieving this.

Prior to today, any trusts set up prior to 6 June 2014 would not have been impacted by the rule change unless they added new property to the trust. Advisers have been cautious not to touch trusts set up prior to this date so as not to remove any tax advantages. Further guidance is needed on what future advice should be.

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

“This appears to be a u-turn on the Government’s previous position. This is potentially good news in terms of removing the administration burden for the settlors of trusts, but advisers face a period of uncertainty regarding what they should do with existing trusts.”

Autumn Statement 20142.73 Inheritance Tax and trusts – Following consultation launched after Budget 2014, the government will not introduce a single settlement nil-rate band. The government will introduce new rules to target avoidance through the use of multiple trusts. It will also simplify the calculation of trust rules. (Finance Bill 2015)

FOR MORE INFORMATION PLEASE CONTACT:

Sophie LentonOld Mutual Wealth023 8091 677007834 499 558sophie.lenton@omwealth.com

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.