Mark McLaughlin highlights a selection of potential tax pitfalls when parents transfer investment property into a discretionary trust for their adult children.
A parent with sufficient means may sometimes wish to transfer an income producing asset. For example, a mother may wish to transfer investment property in London into a discretionary trust for her daughter (e.g. to help cover university costs or supplement income when buying her own home and/or starting a family).
However, there are various tax issues to consider in the above example of property gifted to a UK resident discretionary trust for adult children. This article highlights a selection of potential tax implications to consider (note that further potential pitfalls may arise if the children are minors, which are outside the scope of this article).