HMRC’s annual statistics show that while the number of trusts and estates continues to fall, their income has increased, and the total tax bill is up by 7%
According to figures prepared by the Office for National Statistics (ONS), in 2018/19 there were 151,000 trusts and estates, a drop of 2% from 154,000 in 2017/18. Of these half (58%) are trusts paying tax at the special trust rates.
Total income for trusts and estates came to £2.95bn, up 6% on the previous year.
The total amount of chargeable gains was £3.49bn, an increase of 7% on the 2017/18 figures.
The total tax bill in 2018/19 for trusts and estates was £1.43bn, with both income and capital gains tax (CGT) contributing approximately 50% of the total. This is a 7% increase compared with the previous year.
Zena Hanks, partner in the private wealth team at Saffery Champness, said: ‘A fifth consecutive year of decline in the number of trusts in the UK shows just how challenging the regulatory and tax landscape has become over the past two decades.
‘Trusts have been a public and political whipping boy in recent years, despite the fact that they have served as a staple of financial planning for UK families for centuries.
‘HMRC themselves acknowledge they have a number of important uses – such as protecting assets for those who are underage or otherwise incapable of managing their own wealth, and helping with probate and asset protection for the next generation.
‘Despite the punitive tax regime and their poor public reputation, trusts can act as a lifeboat of security and continuity for people looking to manage their estate succession – particularly in these times of political uncertainty and market volatility.’
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