Technical Videos
Discretionary Trust of Residue for a married/civil partnership client
‘This video will explain why we would recommend a discretionary trust of residue for either a married client, or one that is in a civil partnership.
If you have any further questions, please contact us on:
01926 514 390 Ext 9140
or email us on: estateplanningteam@ctt-group.co.uk
The key points are as follows:
- A discretionary trust is always going to be our go to trust
- The reason, is the added inheritance tax benefit that a discretionary trust offers over other trusts
- This means that any assets that form part of the discretionary trust do not aggregate with the estates of the beneficiaries
- For more information on the benefits of having a trust, please see our ‘benefits of trusts’ video. Click here to view our ‘Benefits of Trusts’ video (coming soon)
- A key principle to consider and understand is the requirement for spousal exemption, available to clients either married or in a civil partnership
- That is, you do not pay inheritance tax on a gift between spouses / civil partners
- A discretionary trust does not immediately therefore, allow you to claim spousal exemption due to the lack of aggregation for inheritance tax purposes with a beneficiary’s estate
- The potential requirement for an interest in possession trust in the future must therefore be considered
- For more information on what we would recommend for a client who is married / in a civil partnership and has an inheritance tax liability, see our ‘Interest in Possession trust’ video. Click here to view our ‘Interest in Possession Trust’ video (coming soon)
- Our discretionary trust allows for the residence nil rate band to be claimed within it and if you would like to know more about how this works, please see our ‘Qualifying for the Residence Nil Rate Band in a Discretionary Trust’ video. Click here to view our ‘Qualifying for the Residence Nil Rate Band in a Discretionary Trust’ video (coming soon)
