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Trustees have so many responsibilities when managing Trusts, it can be daunting. Trustees’ responsibilities include:

1. Fiduciary Duty: Trustees must act in the best interests of the beneficiaries and in accordance with the terms of the trust deed.
2. Investment Management: Trustees must manage and invest the trust’s assets prudently, balancing risk and return in line with the trust’s objectives.
3. Record-Keeping: Accurate records of all transactions, decisions, and correspondence must be maintained.
4. Tax Compliance: Trustees must ensure the trust complies with all relevant tax obligations, including filing tax returns and paying taxes.
5. Distributions: Trustees must make distributions to beneficiaries as specified in the trust deed.
6. Reporting: Trustees must provide beneficiaries with regular reports on the trust’s performance and financial status.
7. Legal Compliance: Trustees must comply with all applicable laws and regulations, including anti-money laundering requirements.

If you require any assistance in understanding your obligations or carrying out the day-to-day administration and preparation of annual trust accounts and completion and submission of tax returns, please contact us today to discuss.

Trust administration is becoming more and more difficult with the ever-changing reporting requirements introduced by HMRC.

If you have a trust that has not still been registered with HMRC then it isn’t too late, and you should act as soon as possible.

If you are finding it difficult to navigate HMRC’s website to understand what is required and what your obligations as a Trustee are, then please book an appointment and we will provide you with assistance.

Discretionary Trusts are required to report the Trust Capital value every 10 years, generally if the Trust has a value of over £325,000 on the 10 year anniversary there will be Inheritance Tax to pay to HMRC. The Nil Rate Band available to a Discretionary Trust can in some case be less than £325,000, the allowance available to the Trust is dependant to gifts made 7 years prior to the creation of the Trust.

When you come to windup Trusts there can also be Inheritance Tax payable, known as an exit charge.

This is another area of Taxation that can be very difficult to understand. If you require any assistance, then please get in touch with us.

This is when a beneficiary is entitled to enjoy the assets of a Trust throughout their lifetime.

When the beneficiary, ‘The Life Tenant’, passes away the Trustees must report the trust assets to HMRC Inheritance Tax office. The Trust assets will be combined with the Life Tenant’s estate value and there could be inheritance tax to pay.

Trustees are personally liable for any tax not settled. If Trust assets are transferred to the remaindermen (ultimate beneficiaries) before settling all liabilities this could put the Trustees in a difficult position. If you have any concerns or if you wish for any assistance with understanding your obligations and risks, then please contact us.

When you sell an investment asset this may give rise to a chargeable disposal, all chargeable disposals must be reported to HMRC either in your personal self-assessment tax return or online via HMRC’s Website.

Part of the Government’s campaign ‘Making Tax Digital’ introduced changes to the reporting surrounding disposals of UK Residential Property. This was introduced in April 2020.

Capital Gains Tax will be payable on gains following sale of second homes. The UK Property Account must be submitted, and the tax settled within 60 days from completion of sale, if not you will be liable to pay fixed penalties and late payment of interest.

With a lot of these changes, they are often difficult to navigate. We at LB Tax Assist Ltd are here to assist you in understanding your obligations and to help you complete the disclosure accurately.

It is often difficult to understand what is allowable to set against revenue and you often find it stressful to complete your annual tax return. If you are a landlord seeking advice, please contact us.

Income and Capital Gains Tax

You have managed to obtain a Grant of Probate as an Executor or Administrator of an Estate and you now are struggling to understand what your duties are in relation to reporting income and capital gains tax during the period of administration.

It is your responsibility as the Executor/Administrator to ensure that all liabilities are settled before you arrange the final distribution to the beneficiaries of the estate.

From the 6 April 2024, if the estate income from any source is less than £500, you do not need to report the estate to HMRC.

What is the period of administration of an estate? It is the period from date of death to the date in which you have called in all assets and are ready to make the final distribution to the beneficiaries of the estate.

If the gross income received during this period is over £500 you must make a disclosure to HMRC and pay the tax prior to distribution to the beneficiaries and then prepare an R185 (certificate if income).

There are two types of disclosures:
1. Request for an Informal Tax Clearance from HMRC. This can be done in writing if the following applies:

• The Estate net value was less than £2.5 million when the person died
• The total income tax and capital gains tax due is less than £10,000
• Total gross proceeds from sale of chargeable assets are £500,000 or less

2. Complex Estate Administration
This is when one or more of the limits above have been exceeded, the executor needs to register the estate as complex and prepare Estate Tax Returns for the period of administration.

With interest rising an investment generating good returns you may need to complete an annual tax return. If you have any concerns about this or need help with completing your annual tax return, please contact us.