What strategy for IHT when using a beneficial interest company trust?

What strategy for IHT when using a beneficial interest company trust?

8:45 AM, 17th June 2016, About 7 years ago 1

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As a sole trader I am interested in the beneficial interest trust as a strategy, however the article doesn’t seem to address the IHT issue. What strategy for IHT when using a beneficial interest company trust

A discretionary trust has been suggested but the 45% tax and 10 yearly IHT tax seems counter productive, any suggestions.

Many thanks


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Mark Alexander - Founder of Property118

8:57 AM, 17th June 2016, About 7 years ago

Hi Tony

The purpose of a beneficial interest company trust is not to avoid tax. The reasons for using a beneficial interest are to enable you to incorporate without a requirement to refinance. They are often used in conjunction with claiming section 162 incorporation relief to reduce CGT and multiple dwelling relief or partnership incorporation relief to minimise SDLT (LBTT if in Scotland.

Please see >>> http://www.property118.com/landlord-tax-calculator/85679/

A further layer of tax planning can be added to deal with IHT but this requires expert guidance from a Chartered Tax Adviser. It is possible to perfectly legally reduce IHT by over 90%, however, it costs quite a lot to set up - typically £50,000 upwards - so it is only viable where IHT liabilities would substantially exceed that figure.

The strategy involves the use of a corporate trust which involves splitting shares into A and B classes. I understood the strategy perfectly when it was explained to me in detail but I'm not even going to attempt to try and explain it fully here because it is extremely complicated.

A gentleman I know in Norwich called Kim Crossley manages a panel of Chartered Tax Advisers across the UK. I suggest he should be your first point of contact if you would like to progress this further. He would arrange an initial meeting with you for free if you download, complete and send him the spreadsheet I have linked to above. Written advice costs £750 and includes a quotation for implementation.

If you would like to contact Kim his email address is kim@hanoverstrategies.co.uk - please mention that I have referred you in order to get the best possible quote.

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