Property Trusts

Property trusts usually refers to a type of discretionary trust where the body, corpus or asset held in trust is one or more properties.
There are a number of benefits to the creation of such a trust, namely:

Inheritance Tax Planning – where the beneficiaries of the estate may not have to sell a property to pay for a large inheritance tax bill on the death of the settlor;
Capital Gains Tax planning – the trust arrangement may reduce CGT;
Rental Income – Rental income from properties held in trust will remain in trust, there can be reduced taxation on rental income.

In order to ensure that the trust is legally correct it is important to have a trust deed drafted which reflects the purpose of the trust and the beneficiaries associated with it. The use of a protector to oversee the trustees can also be a very wise check / balance to ensure the smooth running of the trust over the long term.

It is most important to bear in mind that the benefit attendant upon the trust arrangement is highly dependent upon where the trust is located. This is a complex area with many potential jurisdictions to consider and choose from; in this respect, professional independent advice is crucial and when wisely applied in estate planning arrangements, can pay lasting dividends to many subsequent generations of a family.