Enable of Bishop’s Stortford’s independent financial advisors can see that with people living longer, and with many more having more complex family structures, as people often divorce, remarry and sometimes have second families at older and older points in their lives, there is a place for Trusts in wealth management that is not all about tax avoidance.
The ONS figures for England and Wales in 2012 showed the biggest increase in the number of marriages was for men and women aged 65 – 69, rising 25 per cent and 21 per cent, respectively.
Trusts can be a vital tool for modern families, in helping to cope with children from different relationships, step-children and age-gap relationships and for making sure the right people receive money at the right point in their lives.
HMRC’s own Research Report 25 says that tax is usually a secondary consideration in using a trust:
“The main motivation for setting up a trust appears to be related to control of assets, rather than tax planning as found in both the in-depth interviews and the survey of trustees. While tax planning is important for some, it is usually cited second.”
But HMRC’s proposed extension of the Disclosure of Tax Avoidance Schemes (Dotas) rules could impact mainstream family situations. This new regime requires ‘scheme promoters’ to notify HMRC of a new scheme, which is then allocated a scheme reference number (SRN) which needs to be declared in their tax return. This information-gathering exercise is intended to be an alert system to HMRC, so any perceived abuse of the tax rules can be reviewed and action taken if required.
The consultation closes on 23 October. It’s possible new rules could be in force for April 2015, but the timescale isn’t clear yet. The gap between perception and reality can be large when trusts are viewed as a “tax avoidance scheme” lens, rather than as an everyday reality for further advice Enable’s IFA’s in Bishop’s Stortford are here to help.
Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 – Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE