Trusts are a popular vehicle for protecting wealth or reducing tax liabilities, but it cannot be denied that the number of trusts in existence seem to be in decline. In 2005 there were over 220,000 trusts that submitted Self-Assessment forms, which was 70,000 more than in the latest Government figures from 2019 Trusts statistics October 2020 – GOV.UK (www.gov.uk)
There could be a number of different reasons for the decline in trust returns being filed, but modern trusts are very transitory by nature anyway. Most Trusts have a limited lifespan; even taking into account the maximum 125 year duration that came into force with the Perpetuities and Accumulations Act 2009, very few will survive this perpetuity period.
What is clear is that if you manage Trusts you will inevitably need to close one at some point. It could be a NRB Discretionary Trust that you want to wind up before it is liable to a 10 year charge or it could be a Will trust where the life tenant has passed away and the assets are now being paid to the remaindermen. Whatever the reason, there are essential actions you need to take when closing a trust to ensure you fulfil your obligations and avoid risk.
For example, if you have a trust with business income you will need to maintain records for at least 5 years, to be able to provide information to the HMRC or other law enforcement authorities if requested. Ensuring you have adequate records long after the trust is no longer in existence is vital to meet your legal obligations.
Once again, Gill Steel of LawSkills is at hand to guide you through the process. Her expertise is second to none in the private client field and she is hosting a webinar on How to Close a Trust on 7 April at 1pm.
This is another must see LawSkill’s webinar that we are proud to sponsor. The webinar will cover the potential risks you need to consider, tax consequences, documents required and preparation of accounts.
Our advanced trust administration system, WealthWorks+, is the perfect match for any trust practitioner. WealthWorks+ will help you manage the process of closing a trust and help reduce risk with adequate and secure long-term record-keeping.
To find out more or to book your place on the webinar click here Webinar: How To Close A Trust 7 Apr 2021 – LawSkills Online