Trusts will see significant changes following the Budget, with Alistair Darling's tax on the rich also hitting their estates.
Tax rates on trusts were already due to increase from 2011, but the latest hike in income tax, up to 50% for top earners, will hit beneficiaries hard. Hidden away in the Budget notes are details of the new higher rates of tax faced by all trusts, and some changes to the way discretionary trusts are taxed and distributed. Julie Hutchison, head of estate planning at Standard Life, says: "This acceleration and increase in these trust tax rates is not good news for discretionary trusts." Most trusts will automatically pay the 50% tax rate without needing to reach the £150,000 threshold, ...
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