March 2006 changes to trust taxation

Produced by a Tolley Trusts and Inheritance Tax expert

Trusts and Inheritance Tax

Guidance

This guidance note covers the changes that were made to trust taxation in the 2006 budget and how trusts were treated before that date. It also details the transitional rules and signposts the user to guidance notes which cover the current tax treatment. This note provides useful background information for those dealing with trusts established before 22 March 2006.

The 22 March 2006 changes

22 March 2006 was the day of the 2006 Budget which, without any warning or consultation, made sweeping changes to the IHT treatment of trusts. The date represents a watershed in the IHT treatment of trusts since many of the key changes took immediate effect. To work out the correct IHT treatment of a trust today, it is necessary to look at whether it was made before or after 22 March 2006.

Before 22 March 2006, trusts fell into the following three main categories for IHT purposes:

•
relevant property (RP) trusts, which were usually discretionary trusts
•
interest in possession (IIP) trusts, and
•
accumulation and maintenance

Continue reading the full document

To gain access to additional expert tax guidance, workflow tools, and tax research, register for a free trial of Tolley+™

TAKE A FREE TRIAL NOW

Popular Articles

Personal Tax

Income tax losses ― overview

Income tax losses ― overviewIncome tax losses can arise due to a number of reasons, but not all losses can be relieved against total income and some losses can only be set against certain types of component income. The table below is a summary of the main reliefs for income tax losses.Summary of

04 Mar 2021 12:19 | Produced by Tolley Read more

Owner-Managed Businesses

Trade or hobby

Trade or hobbyInteraction of hobby farming rules and commercialityFarming has its own set of ‘hobby farming rules’, which historically have stated that a profit must be made every six years. This is known as ‘the five-year rule’, in that there can be five years of losses but there must be a profit

14 Jul 2020 13:50 | Produced by Tolley Read more

Corporation Tax

Taxation of loan relationships

Taxation of loan relationshipsThe vast majority of companies will have loan relationships and so will need to consider how they are taxed under the loan relationship rules. There are also specific provisions dealing with relevant non-lending relationships and other deemed loan relationships.

14 Jul 2020 13:48 | Produced by Tolley Read more

UU��ֱ��