Trusts and Estates

Preparing for the future can be a daunting time. Passing on your estate to your loved ones in the most tax-efficient way is crucial and should be a priority in everyone’s personal financial planning. Advice of this nature depends on your specific circumstance, meaning specialist advice should be sought to support your particular situation.

When a loved one passes away, we know how difficult it can be to mourn the loss as well as deal with their financial assets, including their trusts and estates. Information on how your loved one wishes for you to handle their trusts and estates is usually documented in their will. Understanding wills can be difficult, as well as understanding what to do next with trusts and estates, but our team of specialist accountants are here to support you at this stressful time.

At RMT, we specialise in providing advice on trusts and estates, including the types of trust available, estate planning and estate disputes. We undertake compliance work relating to the creation and taxation of trusts, assisting the personal representatives and executors of estates and Inheritance Tax Planning.

Trusts

The taxation of trusts is a complex area of taxation where specialist advice should be sought, since different types of trusts are taxed differently. The main types of trusts include a bare trust, interest in possession trust, and discretionary trust. Full information on the types of trust available and what they mean can be found here.

Trusts are often set up for several reasons, depending on what you or your family members are preparing for. These reasons include:

• to control and protect family assets
• to pass on assets when you die (a ‘will trust’)
• under the rules of inheritance if someone dies without a will (in England and Wales)

There are different people involved in trusts. The settlor will put assets into a trust, trustees will manage the trust, and the beneficiary will be the person who benefits from the trust.

Trusts can also be used, in some instances, for the mitigation of Inheritance Tax.

Legislation set out by HMRC requires trustees to complete an annual tax return where required and provide HMRC with the details of any taxable income and capital gains. At RMT, we understand that this can be complex, so our team of expert trusts and estates accountants can assist with this process to ensure you are fully compliant and that the correct amount of tax is paid.

Our services for trustees include;

• Completion of required compliance work for both UK and non-UK resident trustees
• Filing of trust tax returns and repayment claims where applicable
• Preparation of beneficiaries’ tax certificates
• Completion of annual trust accounts
• Capital Gains Tax advice and reporting
• Inheritance Tax advice and reporting
• Registration with the HMRC Trust Registration Service, maintenance and updates as required

Trust Registration Service

Trustees that incur any kind of tax liability are now required to register the trust with HMRCs Trust Registration Service.

Trusts must register with HMRC by 5 October following the end of the tax year in which the trust first has a liability to tax. This must also be maintained yearly and updated with any relevant changes to persons associated with the trust; otherwise, HMRC can issue penalties.

We can assist trustees in ensuring your trust is compliant with the HMRC Trust Registration Service and support with any trust disputes and trusts and inheritance tax.

Estates

Dealing with the estate of someone who has died, either as an executor or personal representative, can be a difficult task, especially when you are mourning the loss of a loved one. Ensuring compliance with HMRC’s tax legislation when sorting an estate can add to the difficulty of your current situation.

We understand that working with a team who can support you with all the information you need at this time is crucial. At RMT, we offer a specialist service to ensure you are kept up-to-date with everything you need to know, whilst understanding the emotion that comes alongside losing a loved one.

We can advise executors and administrators on their obligations in respect of tax reporting regarding bringing the deceased’s affairs up to date, as well as for the period of administration of the estate, where the estate is in receipt of income and capital gains arise.

Our services for estate planning include;

• The quantification and reporting of the deceased’s final tax position for the period to the date of death.
• Identifying and advising the executors or personal representatives of any reliefs and exemptions available for inheritance tax purposes.
• Quantifying the Inheritance Tax liability due from the estate
• Advise on any post-death planning opportunities, such as the use of a Deed of Variation
• The calculation of any Income Tax and Capital Gains Tax liabilities in relation to the estate and reporting these to HMRC
• Filing of formal estate tax returns where applicable
• Corresponding with HMRC in relation to tax declarations for informal estates
• The registration of an estate with HMRC
• Advise in relation to the tax efficiency of making distribution of assets from an estate

It is worth noting that the period of administration is only for the estate. This is separate to any personal tax returns that may need to be filed on behalf of the deceased for the period up to the date of death.

Take the First Step Today

At RMT, our trusts and estates accountants can support you through your specific circumstances to ensure that you handle taxation on trusts and estates in a suitable manner. We aim to minimise stress and uncertainty during what can already be a difficult time for you and your family. We are here to answer any questions you may have throughout the trusts and estates process.

Contact us today to arrange your free and confidential review, and let us work together to ensure financial stability and ease for your family’s future.