Express Trust - Forms of Trust Used By UK Taxpayers

Forms of Trust Used By UK Taxpayers

Accumulation and Maintenance trust
A variation on the discretionary trust, the A&M does not carry the Inheritance tax disadvantages of a discretionary settlement but can only be established for persons under 25 who must be entitled to income at that age. Allows the accumulation of income within the trust until 25.
Disabled Trust
Similar to an A&M trust but established for a disabled person.
Reverter to Settlor trust
A trust where, on the death of the life tenant, the property reverts to the person making the gift.
Nil Rate Band Discretionary trust
UK inheritance tax is payable at 40% on estates worth over £325,000 for the 2009-2010 tax year. If assets up to that value are placed in a discretionary trust during a person's lifetime, the trust will not be taken into account for inheritance tax if the person survives for a further 7 years. Likewise in a will, many persons leave a legacy on discretionary trusts so as to take full advantage of their nil rate band (gifts to spouses and registered civil partners being wholly exempt).

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