Budget follow-up: 'Trustafarians' left unscathed
'Trustafarians' emerged relatively unscathed from the Budget after Gordon Brown held back on the most controversial proposals for overhauling the taxation of trusts.
Link: Budget 2004
Experts said the announcement of an increase next month to the tax rate applicable to trusts (RAT) – from 34% to 40% – was a relatively straightforward change, but warned that the most controversial proposals were still in consultation.
The corresponding dividend trust rate also rose, from 25% to 32.5%. Patricia Mock, of Deloitte, said: ‘The increase in tax means there’s going to be less in the way of overall funds in trusts for beneficiaries.’