Wednesday, October 22nd, 2008
The new tax rules for “income in possession trusts” have now come into effect
The Finance Act of 2006 changed the rules affecting the tax status of the trusts in certain circumstances. Holders of existing trusts were given until 6th April this year to rearrange them if they wished, such as by transferring them to a different family member, while still remaining under the old tax regime. That transitional period was then extended until 5th October.
The new rules, effective from 6th October, mean that when the income beneficiary of an existing trust is changed, the new beneficiary will be liable to pay tax on withdrawals at up to 6%. There will also be a 6% charge every ten years.
The arrangements can be complicated. Please contact David Edwards if you would like more information.
© Copyright 2008 Burt Brill and Cardens Solicitors