Following the Autumn Budget 2017, on the 7th November 2018, HM Revenue and Customs (‘HMRC’) published their consultation in relation to the taxation of trusts.
The aim of the consultation is to obtain views and evidence on ways in which the rules relating to taxation of trusts can be made:
1. Transparent;
2. Fair and neutral; and
3. Simple
HMRC have asked for feedback as to whether these three aims are reasonable in ensuring improvements to the current taxation on trusts.
The consultation is clear that trusts should not be a vehicle for tax avoidance or evasion, and should simply be used for protection and separation of funds and assets in a variety of different circumstances. In analysing whether this goal is currently being achieved, HMRC has identified issues which cause conflict with the three aims above, which will be discussed in more detail in our Briefing Note entitled ‘HMRC Trust Taxation Consultation 2018’.
If you have any queries regarding the consultation and how it may affect a pre-existing trust, or if you are thinking of setting up a trust and would like some advice on the trust taxation that would apply then please contact a member of the Wealth Planning team.
