Trusts were first conceived at the time of the crusades but nowadays are used frequently in succession planning, inheritance tax mitigation and gifting assets to grandchildren. Put simply, a trust is a vehicle whereby the settlor (the person giving away assets) bestows powers on a trustee (perhaps a third party) to distribute the assets to the beneficiaries.

In general, trusts are taxed at 40% but have their own annual exemption of £4,100 which makes them attractive to those who have already used their personal allowance of £8,200. There are many types including accumulation & maintenance (A&M) trusts that are often used for paying school and university fees. For maximum efficiency, they are set up by grandparents for the benefit of grandchildren because the income is treated as the child's who can use his/her income tax allowance (£4,745) and annual capital gains tax allowance whilst also claiming back basic rate tax.
A life interest trust can be used to protect the family fortune from volatile relationships or marriages because they pay only income (rather than capital) to the beneficiaries until they are much older (eg 40s or 50s), thus protecting a child in case of a divorce.

Writing assets into trust can be expensive but the benefits of doing so frequently far out way the costs. It must be remembered that it is often difficult to unwind a trust once after it has been established and trustees must be chosen carefully to ensure that your wishes are carried out.
ifasw.co.uk has connections to teams of suitably qualified advisers who specialise in trust planning. Working with colleagues in the legal profession, they can advise you on the best course of action to protect your assets. If you feel that trusts may be of benefit to you or your family, then please do not hesitate to contact ifasw.co.uk to discuss your situation. We are waiting to help you - Just ask us by clicking here!