Telmar Estate Planning

Using Trusts to Reduce Inheritance Tax

Protect your wealth. Secure their future.

Trusts are a powerful and effective way to reduce Inheritance Tax liability, protect your assets and provide for the people you care about, both now and in the future.

Family generations protected by trust planning
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Why Use Trusts?

Reduce IHT Liability

Move assets outside of your estate and potentially reduce or eliminate IHT.

Protect Loved Ones

Ensure financial security for your family for generations to come.

Maintain Control

Many trusts allow you to retain control and influence over your assets.

Plan for the Future

Create a lasting legacy and plan for any eventuality with confidence.

Peace of Mind

Professional advice and ongoing support to keep your plans on track.

How We Help With Trust Planning

  • Understand your objectives and family circumstances
  • Recommend the right type of trust for your needs
  • Draft trust deeds and appoint trustees
  • Transfer assets correctly and tax-efficiently
  • Provide ongoing trust administration and reviews
Trust planning meeting between family and specialist adviser

The Main Types of Trusts

We'll help you choose the right trust for your circumstances and objectives.

Loan Trusts

Retain ownership of the asset but hold it in trust for your beneficiaries — receive a loan back from the trust.

Discounted Gift Trusts

Gift assets into trust while retaining certain benefits and a potential immediate IHT discount.

Flexible Reversionary Trusts

Transfer assets into trust but retain the right to benefit for a set period or specified event.

Bare Trusts

Assets are held in trust for a beneficiary who has an immediate and absolute right to the assets.

Discretionary Trusts

Trustees have discretion over how and when to distribute income or capital.

Interest in Possession Trusts

Beneficiaries have the right to income generated by the trust assets, either for a fixed term or for life.

Life Interest Trusts

Provide income or use of an asset for one person, then capital to others.

Trusts for Vulnerable Beneficiaries

Tailored trusts for beneficiaries who need additional protection or support.

All Trusts Explained

Expert Guidance

Using Trusts in Inheritance Tax Planning

How trusts reduce inheritance tax

Assets placed in certain trusts can fall outside your estate for inheritance tax, typically after seven years, while trustees retain control over how and when beneficiaries benefit. This is valuable when you want to reduce tax without handing large sums to younger or vulnerable family members outright. Trusts also offer protection against divorce, bankruptcy and poor financial decisions by beneficiaries. A trust can also provide for grandchildren's education, support a beneficiary with special needs or ring-fence wealth for future generations, all while you decide the rules trustees must follow through a clear letter of wishes.

Trusts that let you keep access

Some trusts allow you to reduce inheritance tax while retaining an income or capital access. Discounted gift trusts provide a fixed income while reducing the value of your estate immediately, and loan trusts freeze growth outside your estate while letting you recall the loan. These structures suit people who want to plan for tax without giving up financial security. Each structure has different tax consequences, investment requirements and levels of flexibility. Choosing between them depends on your age, health, income needs and objectives, which is why we model options carefully before any recommendation.

Tax charges and compliance

Most lifetime trusts are relevant property trusts. Transfers above the available nil-rate band can incur a 20% lifetime charge, with ten-yearly and exit charges of up to 6%. Trustees must register on HMRC's Trust Registration Service and may need to file tax returns. Telmar explains these obligations clearly and designs structures that stay efficient and compliant over time. Good trustees and clear records make the administration straightforward. We can also review existing family trusts to confirm they remain effective, compliant and aligned with your current wishes and the latest HMRC rules.

How We Work

Our Proven Approach

1

Understand Your Goals

We take the time to understand your objectives and family circumstances.

2

Analyse Your Situation

We review your assets and explore the most suitable trust options.

3

Design Your Plan

We create a tailored trust strategy to meet your goals and reduce IHT.

4

Set Up the Trust

We handle all legal requirements and set up the trust correctly.

5

Implement & Fund

We help you transfer assets into the trust and ensure smooth implementation.

6

Ongoing Review

We review your trust regularly to ensure it remains effective and aligned with your goals.

Get Expert Trust Advice

Speak to our inheritance tax specialists today to find out how trusts can help you protect your wealth and reduce Inheritance Tax.

  • 01329 550190
  • admin@telmarestateplanning.co.uk
  • 9 Pier Street, Lee-on-the-Solent, Hampshire, PO13 9LD

Frequently Asked Questions

Your Questions, Answered

A legal arrangement where trustees hold and manage assets on behalf of beneficiaries you choose.
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Ready to Protect Your Future?

Book a consultation today and take the first step towards peace of mind for you and your family.

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