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Buachaill
Buachaill, Barrister
Category: Law
Satisfied Customers: 10539
Experience:  Barrister 17 years experience
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What is the purpose of a discretionary trust where the gifts

Customer Question

what is the purpose of a discretionary trust where the gifts are woked out as percentage of the sale price of a flat
Submitted: 1 year ago.
Category: Law
Expert:  Buachaill replied 1 year ago.
1. There are two reasons to have a discretionary trust where the gifts are a percentage of the sale price of a flat. The first is as a tax shelter. No tax arises on the transfer of the flat to a discretionary trust. This at a minimum defers any tax payable. Secondly, setting up a discretionary trust enables an element of control after the setting up of a trust thereby enabling subsequent facts to be taken into account by the trustees in exercising their discretion. A gift may be not followed through if the trustees so decide. In this way the behaviour and financial situation of the potential beneficiaries can be taken into account.