In the Budget held in the UK in early July it was confirmed that estate planners may continue to use multiple trusts as a means to manage assets particularly in the event of death providing that they are set up and funded on different days.
Previously multiple trusts could be set up simultaneously and a fraction of assets settled into each in order to take advantage of the inheritance tax (IHT) nil-rate band. However, the changes that have come into effect restrict this procedure. Firstly trusts can now only be set up and funded on different days and secondly there will no longer be an unlimited number of IHT nil-rate bands.
The changes came into effect on the 6 April 2015 affecting trusts to which same day transfers had been made. Trusts established before 10 December 2014 are protected from the changes providing that no further same day additions are made since that date or if the additions do not exceed £5,000.
If you would like to learn more about the use of multiple trusts to protect assets in the UK or in any other jurisdiction please do not hesitate to contact us.