They were originally used by those leaving to fight the Crusades, and the intended purpose was to transfer land to trusted friends to manage on their behalf while the individual was away.
Today, trusts have evolved into vehicles not just for the protection of personal assets and wealth, but into tax efficient tools for individuals regardless of wealth size. Examples of trusts that can be set up include:
- Bare Trust
- Accumulation Trust
- Interest in Possession Trust
- Mixed Trust
- Discretionary Trust
- Non-resident Trust
What are the benefits of a Trust in 2026?
Tax efficiency – Trusts structured correctly provide an excellent tax efficient tool in helping to reduce one’s estate for Inheritance Tax (“IHT”) purposes. With the recent Budget announcement that the IHT nil rate band would remain at £325,000 for several further years, more and more individuals are now falling or likely to fall within the scope of Inheritance tax. Even modest estates now exceed the £325,000 threshold, with increases in the family home value alone.
Asset Protection – Trusts provide a safeguard for family assets for financially inexperienced family members, or protection from divorce settlements or third-party claims. Trusts can be used to protect and preserve assets for vulnerable beneficiaries, such as children under 18 or individuals with disabilities.
Succession planning – Trusts provide great flexibility for determining how and/or when assets are distributed among beneficiaries, which may be useful for ensuring assets are passed on to specific individuals, such as children and grandchildren, or for ensuring beneficiaries receive assets or income derived from assets at appropriate ages or under certain conditions.
Privacy – Details of trusts and assets within the trust are not disclosed publicly, keeping such details confidential.
Control – The use of a trust can allow the settlor (individual who has passed the assets into trust) to retain control over how the assets are managed and distributed, even after death.
How can we help you
Our tax team have extensive knowledge of the UK tax system, and experience in assisting our clients with identifying the correct type of trust that may be beneficial based on their personal and family circumstances. We advise on all tax compliance and reporting aspects around trusts, so our clients may understand from the outset the obligations and practical administrative savings that might be made with suitable structuring.
If you’d like to discuss this further, please reach out to your usual Kilsby Williams contact, or one of our estate planning and trust advisory experts:
- Anne Smith, Partner – Anne.smith@kilsbywilliams.com, 01633 653 150
- David Pescod – David.pescod@kilsbywilliams.com, 01633 653 194
- Jennifer James – Jennifer.james@kilsbywilliams.com, 01633 653 171
- Jamie Cannings – Jamie.cannings@kilsbywilliams.com, 01633 654 154
