Using trusts to save inheritance tax on properties

The tax treatment of trusts has changed pretty radically over the past few years. Even after the tightening up of the rules though, they can still be effective in reducing inheritance tax. This is particularly the case if you have substantial property investments in your estate. In this case a simple gift of the properties to your family would crystallise a capital gains tax charge. Given the extent to which property values have increased this could represent a huge tax charge - made worse by the fact that this gives rise to a cash flow disadvantage as the CGT liability still needs to be paid even though there may be no proceeds to pay the tax with (if the property was gifted). Using a trust in this case can prove attractive as it can allow any capital gain on the transfer to family members to be deferred. It can still provide for very favourable inheritance tax treatment as well. We've looked at this in more detail in a recent article: How to save inheritance tax of £370,000 on your investment properties After an overwhelming response from members you'll be seeing a lot more inheritance tax planning articles on the website (as well as plenty of CGT, offshore and non dom articles!!)