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property in trust

could more experienced members provide me with some ideas on what to consider if client wants to put a but to let property into a trust which then will pay out on a monthly basis to cover school fees for a child?

have not done this before and would be grateful for some ideas 

with many thanks


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By LyneT
08th Jan 2013 12:41

few things to consider

Well the main thing would be that the trust would be settlor interested.  The income would be assessed as his own.

The trust would be a relevant property trust, and subject to 10 yearly charges.  Depending on the value of the property, there would potentially be an IHT charge when it was set up.

Why does he want to do that?


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08th Jan 2013 12:56

he is a higher rate tax payer and I believe he hopes to get the income taxed at the child's rate


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09th Jan 2013 17:51

He wont be able to..

but I have seen this...

Grandparents create a Nil Rate Band (NRB) trust for their grandchildren, the initial gift is covered by the NRB such that withdrawals made within the first 10 years for the grandchildren’s ‘maintenance, education and benefit’ are IHT free. Any withdrawal would remove a significant amount of the value from within the trust such that any further charges (ie the 10 year charge) should be relatively low.

As Lyne T says - setting it up himself will mean any income will be taxed as if it is his own.


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10th Jan 2013 12:02

thank you very very much, i will look into this.

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