What are Trusts?

Trusts are legal bonds within which property can be owned, as opposed to private ownership. They provide a way around some Capital Gains charges which may be incurred when the property is sold. So they are beneficial because assets are to some extent protected from tax, which means that when it comes to inheritance, more of your assets will go to your family. Trusts can also be used for protecting assets from dependants, who may otherwise use your property in ways you would not want.

Trusts can therefore be highly useful in terms of keeping unwanted costs at bay. However they are complicated legal documents, and so if you think they could be of benefit to you, then consulting a professional is really the only way to go. The government is starting to clamp down on these tax reducing methods, however, and as of March 2006 some new rules have been introduced. Your tax and trust advisor can keep you informed of all the latest changes in the law, ensuring you remain one step ahead.

Do I really need professional advice?

The whole area is quite complicated, and if you have a number of taxable assets then it is advisable to consult these professionals. In the long run they could save you money, and make sure you stay on the right side of the law.

If you do decide you need professional advice, some websites may be of some use:

• www.unbiased.co.uk will match you with specialists that meet your requirements in your area.
• Alternatively, www.landlordzone.co.uk provides the names of some tax and trust specialists, with their contact details.

How much are they likely to cost?

The cost will vary depending on the tax firm or financial advisor you choose. Some will not charge for an initial meeting, but it is a good idea to find this out first. There will often be different payment arrangements, either hourly, flat fee, or based on commission, and you can expect hourly charges to generally be between a hundred and three hundred pounds an hour. This advice is not cheap, but in the long run, they could save you more. They'd better be useful…

Tax and financial advisers all specialise in different areas, and in this case you will be looking for specialists in Investment Trusts, Taxation Planning, and general Property Law and Tax. In the initial contact you have with them, whether it be by interview or over the phone, ensure that you tell them exactly what you want and ask them what services they can provide in order to help you best. If they are unreliable about returning your phone calls or emails in the first instance, then look elsewhere, because you will need someone you can rely on.

You will also need to enquire as to the qualifications they hold. In this instance, it is essential that they have Incremental Tax qualifications, called 'Taxation and Trusts G10' from the Chartered Insurance Institute.
Also look for the Advanced Financial Planning Certificate, (APFC), of which the Taxation and Trusts aspect is a compulsory and integral part.