IHT implications of trusts
You'll learn how inheritance tax applies at each stage of a trust's life—from when the settlor creates it, through the ten-yearly charges while assets sit in the trust, to when beneficiaries receive distributions.
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In this lesson
- 0:00 IHT implications of trusts overview
- 0:23 Lifetime transfers and chargeable lifetime transfers
- 0:51 Principal charge and exit charge explained
- 1:35 Discretionary trust during lifetime scenario
- 2:38 Discretionary trust on death scenario
About this lesson
This video walks you through the key IHT implications of discretionary trusts, including chargeable lifetime transfers, principal charges, and exit charges, with worked examples showing the difference between setting up a trust during lifetime versus on death. Understanding these mechanics is essential for ATX and SBR, where trust taxation questions frequently appear in both objective tests and case studies. By the end, you'll be able to explain the full tax journey of trust assets and calculate which approach minimises the IHT burden for your clients.
Duration: 4m
Transcript
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