Bare trusts for minors could be hit by CGT

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Threesixty is warning advisers recent changes to the Inheritance Tax treatment of trusts may also trigger Capital Gains Tax charges on parents who place assets into a designated account for their children.

It says designated accounts are the most common way for parents to hold investments such as unit trusts and open ended investment companies (Oeics) in trust for the benefit of their children. But threesixty, which provides support services to IFA firms, warns the changes in last year’s Budget means these types of arrangements, commonly a form of ‘absolute’ or ‘bare’ trusts, are not only subject to IHT but also to CGT. The company says last year's Budget stated a trust arrangement where the beneficiary is a minor child of the settlor should be considered as a Settlor Interested Settlem...

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