TaxPersonal TaxPrimarolo: trust crackdown claims ‘incorrect’

Primarolo: trust crackdown claims 'incorrect'

Paymaster general wades into row over trust changes brought in in Wednesday's Budget

Paymaster general Dawn Primarolo has denied that changes to trusts set up for
inheritance purposes announced in the Budget will affect 100,000 families.

In a letter to The Times, Primarolo says that the claims are ‘incorrect’ and
that ‘there are only around 100,000 discretionary trusts in total in the whole
of the UK’, and that a small number of those were ‘accumulation and maintenance’
trusts, the trusts affected by the changes.

Primarolo also says that people with such trusts are unlikely to be affected,
given the range of allowances the trusts enjoy.

Advisers have claimed that the new rules, which the government had not
consulted on, constituted a huge crackdown on the trusts, and would mean a
charge of around £40,000 for estates worth more than £1m.

‘To be affected by the new measure, individuals would have to have placed
assets into a trust, excluding their homes and over and above any savings that
they would need access to, in excess of £275,000 and be seeking to avoid IHT.
Such individuals make up only a tiny fraction of the wealthiest top one per cent
of the population,’ Primarolo wrote.

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