Decline in the use of trusts

Information from HMRC reported by the Financial Times showed that the number of trusts in the UK declined steadily from 2008-09 to 2012-13, as did the amount of tax they paid. The introduction of the transferable ‘nil rate band’ for inheritance tax in 2007, which allowed a married couple to share IHT allowances of a total of £650,000, meant that many trusts that had been set up to mitigate inheritance tax previously were no longer needed. Moreover, experts said that tax changes, especially a rise in the gains tax and income tax rates applied to trusts, meant that they now offered no significant tax advantages.

There can be good reasons for using trusts, but these are mainly to do with control, especially over capital intended for future generations.