Tuesday July 6, 2010 at 11:23am
Discretionary trusts can be a good way of avoiding inheritance tax on your capital. They can also allow you to exert control over the trust assets by being a trustee.
However, there is an entry tax (or chargeable lifetime transfer) of 20% on all transfers that exceed an individual’s inheritance tax nil rate band (£325,000 in 2009/10 tax year). This can be a major obstacle where assets exceed this amount.
Normally a gift into trust is still chargeable to inheritance tax in the fir....