What is a Trust and how can it transform your financial affairs

A Corporate Trust is a legal entity that takes the role of a permissible guardian on behalf of an individual or organisation for management and transfer of assets to the beneficiaries. It can be a useful structure which is taking the industry by a storm; the only question remaining is will you be caught up in the swirling tornado or ground yourself at the root of the solution.

This concept is not as confusing as it is often made out to be. A trust in its traditional term is ‘to have belief and faith in a system that is in existence for your highest interest’. To acknowledge your capital to be in safe hands, to be looked after, and controlled under your wishes, is a desirable concept.

Trusts are not separate legal entities so consequently it is not detached from the business or individual regarding accountability. However, they are preserved as a separate entity for taxation. Trustees often incur tax charges on behalf of a trust but this is depending on the type of trust you may have:

  • Income Tax

  • Inheritance Tax

  • Capital Gains Tax

Trusts have a crucial part in financial preparation for individuals, families, and companies. They are engineered to act as armour to help guard assets against any possible forthcoming legal responsibility of the settlor.

There are more flexibilities involved in the means of forming a Trust. For example, although it is usually formed while the individual is alive by a trust deed, it can also be incorporated in their will which comes into existence after the person passes away. A trust is most vital when an individual will no longer be around to control what happens to their capital. The Trustee is then responsible to carry out their duties to honour your wishes.

You may want to enquire whether you need a Trust or not, and chances are if you are thinking about it, you most likely need one. It is a popular misconception that you must be in the top percentage of the income band to consider one. Trusts are commonly shaped to offer a fixed structure to manage assets for the advantage of loved ones or unique purposes. Sometimes trusts are created to help look after assets for vulnerable beneficiaries who may not be in the right position to overtake themselves, such as children and people living with certain illnesses or disabilities. However, in most cases trusts can be used to manage the income of a set of investments for lasting arrangements.

More Group can provide continued stability, expertise, and asset proficiency by ensuring you avoid any conflicts of interest which can occur in matters of family businesses or partnerships.

Having the overseer and the beneficiary as potentially the same person can upsurge specific difficulties. By separating the two, you can have a clear cutout role by concentrating on building stronger business and family relationships by giving yourself the luxury of having peace of mind that your assets are handled with care and proficiency without having to right-hand deal with the obligations and legalities.

The core duties More Group can cover as a Corporate Trustee:

  • Periodic distribution of income or principal as outlined in the trust document

  • Preparation of trust tax returns

  • Termination of trust and distribution of trust assets as specified in the trust document

  • Collecting and distributing income from trust assets

  • Safekeeping of assets

  • Invoice payment

Note: The information should not be construed as legal or other advice as it designed as an information source only © More Group 2018. All rights reserved.