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|Thursday 24th June 2010|
|24/06/2010 - New Capital Gains Tax Changes hit Wills and Trusts|
The Capital Gains Tax (CGT) increase announced in this week’s budget will mean people administering the estates of the deceased could feel the full brunt of the rise as gains made will be at risk of exposure to the new higher rate, warns Jonathan Hall of Gill Akaster.
The new rate of 28 percent could hit any gains made while an estate is being administered, and also gains for the duration of a trust.
Will trusts, created by parents of young children or vulnerable adults, are particularly exposed to the new regime..
Jonathan Hall, Head of Gill Akaster Solicitors’ Wills and Trust department says:
“Many hardworking families often look to create a protective tax regime for their children if they are orphaned at a young age by leaving assets in trust until the children are old enough to manage the assets without the guiding hand of their parents.
“There is a real danger of trust assets being eroded through a combination of income tax at 50 per cent, CGT at 28 per cent and the impact of the changes to the inheritance regime introduced in 2006.
“Personal representatives, trustees and anyone else appointed to set up a trust and settle assets within it should urgently seek advice from their solicitor to ensure that arrangements are structured as tax efficiently as possible for the benefit of these vulnerable beneficiaries in the light of these new developments.”
Gill Akaster is urging trustees and those charged with the task of administering an estate to tread carefully when reviewing trusts or practices in light of the new CGT rate.
“This reinforces the importance of using a solicitor instead of an unqualified, unregulated will writer for trust or probate matters. In light of this new tax regime and the complications that come with it, do you really want an unqualified, unregulated executor or trustee administering your estate after you pass away, rather than a solicitor who is professional, robustly regulated, qualified and insured?
“Even where a solicitor has not been appointed to administer a trust or estate, anyone who has been given that role should go to a solicitor, who is best placed to take all these issues into account.”
If you do not have a will and need a solicitor write one, contact Jonathan Hall of Gill Akaster Solicitors on 01752 203500.
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