HMRC Trusts data 'growing in wealth but not in number,' says Canada Life
The UK's HMRC today published data from the capital gains tax that showed an increase of 9% growth in gains by trusts over the past year.
Kim Jarvis, technical manager at Canada Life said this could signal a realignment of CGT with income tax by the chancellor. "Today's release shows that Capital Gains Tax (CGT) continues to be a reliable source of income for the government with the amount payable on gains made by Trusts increasing by 9% on the previous year."
This brings the total up to £715m. It is rumoured that the chancellor is looking at bringing CGT in line with income tax, which could apply to trusts as well, meaning that CGT jumps from 20%, where it is currently, to 45%. With this in mind, advisers should consider using their £6,150 annual exemption this year or perhaps bringing forward any planned beneficiary payments by a year.
She went on: "Trusts appear to be growing in wealth however not in number, as the amount of trusts falls for a fifth consecutive year. Meanwhile the amount of tax payable in trusts has increased by 7%. Considering how much wealth is now sitting in trusts, trustees must ensure that they continue to diversify their investments and take advantage of all available exemptions and reliefs."
"Obtaining professional advice remains the best way of navigating what is an increasingly complex world."
Jarvis said: "It will also be interesting to see whether the newly introduced changes to the Trust Registration Service, which widened the definition of those trusts required to register will contribute to the drop in trusts being created as Trustees become fatigued by the amount of administration this will bring."
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