Skandia is urging the government to reconsider what it describes as a "stealth tax on children" following confirmation gifts to minors through absolute trusts will be liable for tax charges.
Changes to the ways trusts are taxed was announced in last year’s Budget Statement in March, and was designed to limit Inheritance Tax (IHT) avoidance, however Skandia says HM Revenue & Customs (HMRC) has now confirmed gifts in an absolute trust for children under the age of 18 will be classed as chargeable lifetime transfers (CLTs) and not potentially exempt transfers (PETs). HMRC has suggested this is because a child cannot access the trust until they are 18, rather than immediately, however Skandia points out this means trusts for minors will be penalised by being liable for entry, ex...
To continue reading this article...
Join Professional Adviser for free
Signup and gain exclusive members-only insights
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes
