Kevin Read points out that the Court of Appeal has recently clarified the conditions for trustees seeking to claim business asset disposal relief for capital gains tax purposes.
There are many reasons for setting up trusts, even without considering their creation for tax planning purposes.
For example, trusts can provide protection of assets on divorce or bankruptcy. Putting family company shares into trust can allow decisions as to who will eventually get those shares to be deferred (e.g., so that they might be eventually appointed out to those who are more involved with the business).
The inheritance tax rules of trusts are very complex; no trust transactions should be entered into without taking appropriate advice. I am not going to discuss these issues in this article. Instead, I will concentrate on capital gains tax (CGT) business asset disposal relief (BADR) and will assume that shares to which I refer
