Establishing and managing trusts goes far beyond tax considerations and their benefits. Often, individuals create trusts to safeguard or segregate specific assets or sums of money from the rest of their estates. Trusts can serve various purposes. They can be particularly advantageous when transferring shares within a family company or business to children and grandchildren.
Given the complexity of trust law, it is essential to seek expert advice. Our Private Client team at Sydney Mitchell is equipped to provide expert guidance on trust creation, advice in relation to pre existing trusts and ongoing trust administration and their administration.
Trust creation
People consider creating a trust for many different reasons. For some it is about inheritance tax planning, whereas for others it might be to make financial or housing provision for a vulnerable or disabled loved one. Some people create a trust as part of succession planning for their business but for others a trust could simply be a receptacle for a personal injury award.
As part of our advice service, we will advise you on the suitability of each type of trust structure for your particular circumstance, which will inevitably involve consideration of the tax implications. When you are comfortable with the type of trust you want to create, we can then draft the appropriate documents for you.
You might already have been advised by your accountant or financial adviser that you should consider creating a trust for a specific purpose. If you wish to do so, we can prepare trust documents for you as a ‘stand alone’ piece of work without duplicating the advice that you have already received (and paid for!).
We will also advise you on the implications of creating a trust, including ongoing compliance aspects such as completion of tax returns and registering the trust on HMRC’s Trust Registration Service.
Trust administration
Once a trust has been created it becomes a legal entity and its trustees have legal duties that they must comply with. A trustee owes duties of honesty and integrity to the beneficiaries of the trust. They must act exclusively in the best interests of the beneficiaries and be actively involved in decision making. They must set aside any personal interest they might have in the trust when acting in their role as trustee.
Trustees duties include adhering to the terms of the trust, ensuring the trust’s compliance of with tax and legal requirements and maintaining accurate records such as trust accounts.
Trustees must also ensure that the trust is registered on HM Revenue & Customs’ Trust Registration Service (TRS) unless an exemption applies. They are also responsible for ensuring that the trust’s registration is kept up to date when any changes occur.
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