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seanferguson13
seanferguson13, Solicitor
Category: Law
Satisfied Customers: 31
Experience:  3 year qualified solicitor with expertise in UK taxation.
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can the settlor receive an income for a trust set up for

Resolved Question:

can the settlor receive an income for a trust set up for beneficiaries?
Submitted: 3 years ago.
Category: Law
Expert:  seanferguson13 replied 3 years ago.
seanferguson13 :

Hi there

seanferguson13 :

I will endeavour to help with your question.

seanferguson13 :

The straightforward answer is yes, but this will become a "settlor-interested" trust and put you into a penal tax regime. It will potentially have disadvantages for income tax and IHT.

seanferguson13 :

Does the trust just have money in it or does it hold property?

Customer:

IHT isn't a problem, I want to give my Partner an income when I die and then on her death the capital reverts to my children.

Customer:

Regards

Customer:

Jeremy

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Expert:  seanferguson13 replied 3 years ago.
Generally speaking - and it must be generally when talking about the taxation of trusts - all of the income arising to the trust (irrespective of who it has or will be paid out to) is taxed on the settlor if the settlor retains an interest. In principle capital gains will arise to the Trustees unless we are talking about pre 2008 gains which can arise to the settlor.
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