Family benefit trusts meaning

In this issue: Employee benefit trusts Budgets, Autumn Statements and Finance Bills Remuneration issues for financial services firms Useful Information Weekly highlights from other practice areas Employee benefit trusts JTC Employer Solutions Trustee Ltd (as trustee of the Henderson Family Benefit Trust) Garnett [2024] EWHC 3128 (Ch) This claim sought rescission of a number of deeds of appointment made under two employee benefit trusts (EBTs). The appointments established sub-trusts for named employees and their families under each trust and, in HMRC’s assessment, caused the appointed assets to fall outside the exemption in section 86 of the Inheritance Tax Act 1984 (Section 86), thereby creating potential inheritance tax exposures. The claimants argued that the appointments were executed on the mistaken assumption that the assets would remain within the Section 86 exemption, and that this error was sufficiently serious to justify setting the deeds aside. HMRC, in correspondence, raised objections that included the prospect of refusing relief on public policy...

In this issue Powers of attorney and advance decisions Court of Protection Elderly and vulnerable clients UK taxes for Private Client HMRC Manuals updates Tax avoidance, evasion and non-compliance Budgets and Finance Bills Contentious trusts and estates Pensions, insurance and tax efficient investments Scotland, Wales and Northern Ireland International Question of the week Additional Private Client updates this week Daily and weekly news alerts LexTalk®Private Client: a Lexis+® community New and updated content Dates for your diary Trackers Latest Q&As Useful information Powers of attorney and advance decisions OPG upgrades processing time for LPA applications The Office of the Public Guardian (OPG) has confirmed that from 2 December 2024 the revised timescale for lasting power of attorney (LPA) applications is eight to ten weeks, down from 16 weeks. This encompasses the statutory four-week waiting period. See: LNB News 03/12/2024 9. Source: About our...

SM v MM and others [2024] EWFC 463 SM v MM (No 2) [2025] EWFC 244 SM v MM (No 3) [2025] EWFC 245 What are the practical implications of this case? A judicial conclusion that a trust is a sham is exceedingly uncommon in divorce proceedings. Here, it came after the husband consistently asserted that a trust said to have been created in Cyprus in 2007 by his father with professional trustees was a standard, legitimate discretionary arrangement for the benefit of the parties’ two children. He argued it owned just one asset: the single issued share in a holding company, with the underlying trading businesses managed by wholly independent third parties. The wife’s case was that the trust was a sham and that the assets within it, valued at about £38m, were in truth controlled and beneficially owned by the husband. The initial hearing extended to roughly 12 days, during which live testimony was received from 29 witnesses...

FORTHCOMING CHANGES At the Budget on 26 November 2025, the government outlined small corrective updates to the residence-based tax rules introduced by Finance Act 2025. Key measures are: Newcomers seeking access to the foreign income and gains (FIG) regime must be at least 10 years of age at the start of the tax year. Claims for FIG relief are confined to offsetting the particular foreign income, foreign employment income or foreign gains to which they directly relate. Aligning the qualifying asset holding company (QAHC) framework so carried-interest-style returns connected with services provided to a QAHC benefit from FIG relief. Amending the capital gains tax (CGT) residence test for personal representatives so they are not UK resident where the deceased was UK non-resident but was a long-term UK resident for inheritance tax purposes. Introducing a requirement to file a tax return where an individual is not entitled to the annual exempt amount for CGT under the FIG regime. Minor revisions to the...

Although beneficiaries cannot ordinarily amend the terms of a testator’s Will or the intestacy rules, save perhaps through a court order following a claim under the Inheritance (Provision for Family and Dependants) Act 1975 (I(PFD)A 1975), those who would benefit under a Will or on intestacy can agree a post-death rearrangement to alter the practical effect of the Will or intestacy provisions... instruments of variation disclaimers distributions pursuant to precatory trusts distributions from discretionary Will trusts claims under I(PFD)A 1975 Where the parties agree on a revised outcome, they often opt for a formal post-death arrangement rather than the original beneficiary making a lifetime gift, to secure tax mitigation. Subject to specified conditions, certain rearrangements can be treated for tax as if made by the deceased, thereby avoiding the risk of further inheritance tax (IHT) if the original beneficiary were to die within seven years of transferring the asset... Instruments of variation An instrument, or deed, of variation...

If a claim under the Inheritance (Provision for Family and Dependants) Act 1975 (I(PFD)A 1975) proceeds to a final hearing, the court can make one or more of the following orders: regular periodical payments for a stated duration a lump-sum award of a specified amount transferring identified property to the applicant settling specified property for the applicant’s benefit acquiring designated property from the estate and either transferring it to the applicant or settling it for their benefit varying any ante-nuptial or post-nuptial settlement (including one created by Will) made on the parties to a marriage to which the deceased belonged, so as to benefit the surviving party, any child of that marriage, or anyone the deceased treated as a child of the family in relation to that marriage an order varying any settlement made: during the subsistence of a civil partnership formed by ...