Talk:Taxation of trusts (United Kingdom)

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[Untitled]

--Malark2718 (talk) 22:13, 15 February 2009 (UTC) I find this a bit hard to read:[reply]

Simplifying a little, the rate of IHT is that proportion of what the next ten-year charge would have been, that the time which has elapsed since creation or the last ten year charge bears to ten years.

Can I suggest the following replacement:

Simplifying a little, the rate of IHT is a proportion of the 6% charge which applies every ten years. The proportion is the number of years since either creation or the last ten year charge, divided by ten. So if Trust A was created in 2001, and an appointment (payment) is made in 2009, 8 years have elapsed so the charge is $(8\div 10)\times 6\%=4.8\%$ . Trust B is created in 2004. It is still in existence in 2014 so a tax charge of 6% is made. An appointment (payment) to beneficiaries is made in 2017; this is 3 years after the last charge so the IHT due is $(3\div 10)\times 6\%=1.8\%$

Could someone also confirm that the 6% (or proportion) is charged on the current value of the assets in the trust, not the original base value when they were placed in the trust? Thanks. —Preceding unsigned comment added by Malark2718 (talk • contribs) 16:12, 18 February 2009 (UTC)[reply]

Thanks for that thought. Yes, I agree an example might help. One problem with your suggestion is that it might be misleading, in that the time-apportionment is actually done in 40 3-month segments not 10 1-year segments. AndyJones (talk) 12:35, 5 August 2024 (UTC)[reply]