ATT warns about start date for proposed new trust tax rules
Natalie Miller, President of the ATT, commented:
“HMRC have opened a third consultation on the issue of simplifying the tax calculation for the ten year and exit charges for trusts. The ATT’s Technical Team will be providing a full response to the proposals, including the recommendation that settlors should be given a ‘settlement’ nil-rate band (“SNRB”) which will be separate from and unconnected with their own personal nil-rate band.
“Trustees and their advisers need to note that if the new proposals are included in next year’s Finance Bill, they will apply not only to new settlements created after 6 June 2014, but also to any additions to existing trusts that take place after that date. Even a change in the terms of an interest-in-possession trust created before 22 March 2006 will also be caught by these anti-forestalling provisions.
“I would recommend anyone who has been involved recently in setting up a trust or in making any additions to existing trusts to consider this consultation document.
“HMRC have confirmed that if any IHT charge arises before 6 April 2015 in respect of a settlement created or added to after 6 June 2014, they will at least be calculated in accordance with current rules. However, advisers will still, in these cases, need to discuss with the settlor and the trustees how much of the SNRB, if the proposals come into force, should be allocated to the newly created trust or new additions to existing trusts.”
Notes for editors
1. The HMRC consultation document is available here.
2. Association of Taxation Technicians
The Association is a charity and the leading professional body for those providing UK tax compliance services. Our primary charitable objective is to promote education and the study of tax administration and practice. One of our key aims is to provide an appropriate qualification for individuals who undertake tax compliance work. Drawing on our members' practical experience and knowledge, we contribute to consultations on the development of the UK tax system and seek to ensure that, for the general public, it is workable and as fair as possible. Our members are qualified by examination and practical experience. They commit to the highest standards of professional conduct and ensure that their tax knowledge is constantly kept up to date. Members may be found in private practice, commerce and industry, government and academia.
The Association has over 7,500 members and Fellows together with over 5,000 students. Members and Fellows use the practising title of 'Taxation Technician' or ‘Taxation Technician (Fellow)’ and the designatory letters 'ATT' and 'ATT (Fellow)' respectively.
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