Family Discretionary Trust

It is more flexible as it gives trustees discretion to pay income or capital to the beneficiaries.
Unlike a bare trust, there is a class of beneficiaries who can benefit from the trust and these beneficiaries are not entitled to the assets of the trust upon attaining 18 years.
The anti-avoidance provisions which apply to parents setting up a bare trust also apply to discretionary trusts.
The only difference is that the income will become taxable on the parents on distributions to the minor child instead of being taxable on the income as it arises.
If the parents set up the trust with the intention to fund school fees, then a discretionary trust may not be a tax efficient option.
However, as the income is not taxed on the parents or the beneficiaries as it arises, the parents could transfer income producing assets into the trust and the income can be accumulated over a period of time and subsequently used to fund university fees.
Anti-avoidance provisions exist to avoid parents diverting income to minor children by creating a trust.

We can also help you with:

Family Discretionary Trust

Life Insurance is a type of insurance policy that can help minimise the financial impact that your death could have on your loved ones. If you die

Interest in Possession Trust

For a married couple with an estate value in excess of two ‘Nil Rate Bands’, the recommendation would be to use: – A Flexible/Family

Sibling Trust

WHY USE MULTIPLE SIBLING TRUSTS? Setting up a Trust is a flexible way of giving away assets without passing them absolutely to Beneficiaries,

Pension Death in Benefit Trust

New flexi pension rules give a variety of possible options available to surviving beneficiaries of a deceased pension scheme member. One of the possible

Family Pension Death Benefits Trust

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Family Gift Trust

Want to gift to reduce Inheritance Tax liability on death. Want to provide a deposit for a beneficiary’s house purchase Want to make provision whilst alive

Life Insurance Trust

Most couples own their property as “Joint Tenants” which means that on the death of one of them, the property passes to the survivor automatically.

Family Business Trust

Establishing Family Business Trusts to receive business assets on death is the most protective and tax efficient means of dealing with such assets.

Educational Trust

The cost of private school (age 4-18) is now over £300,000 per child, with most parents paying an additional £200,000 in income tax.

Family probate preservation plus trust (Asset Protection Trust Plus)

Used most commonly to ‘ring fence’ major assets such as the family home providing peace of mind that the assets are protected for future generations.

Death in service Trust

Home insurance (or house insurance) protects you from insured events that damage your home or your belongings. For example, if your home is