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Fiduciary Advice
Trustee Responsibilities
We advise trustees about their duties and powers under the terms of a trust, provide risk-analysis, and practical solutions to complex trust problems. We review existing trust structures to ensure that they continue to serve the original purposes in light of changes in the law and a family’s circumstances, draft trust documents, provide legal opinions and negotiate trust terms.
We also offer trustees the possibility of entering into a service agreement with our firm, to oversee all legal aspects of a complex structure, taking responsibility for a trust’s continued effectiveness and fitness for purpose. As part of this service, we ensure that any relevant changes to the law, or any alteration in tax treatment, in any jurisdiction which might be relevant, is assessed and accounted for in the structure, as well as answering all queries which a trustee or protector may have from time to time.
We provide U.K. and U.S. focused advice on how a range of issues, for example how the insolvency or divorce of a settlor or beneficiary is likely to be treated, and can assist in drafting tailored settlements, or advising on alternative solutions, where these factors may be relevant considerations.
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U.S. Tax Advice
We advise trustees on complying with the complexities of U.S. tax law, particularly as it pertains to complex foreign trusts. We advise on minimizing the application of the accumulation distribution rules and other adverse U.S. tax consequences. We also advise on the taxation of investments.
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U.K. Tax Advice
We assist trustees to tackle the full range of issues which come into play when a trust has U.K. resident settlors, beneficiaries, trustees or investments. Examples include the rules and consequences of a trust ceasing to be or becoming a U.K. resident trust; efficient structuring of U.K. investments of offshore trust assets; a change of beneficiaries’ residence status; the domicile status of interested parties; the application of inheritance tax, capital gains tax and income tax to onshore and offshore trusts; and trustees’ compliance and reporting requirements. Taxation rules in the U.K. change often, and we help trustees to understand the subtleties in terminology and application, for example notions such as a “relevant person” in the context of remittance into the U.K. (into which category a trustee can fall), and the definition of “settlor-interested” trust for income, capital gains and inheritance tax purposes – which are neither intuitive nor straightforward. We also advise trustees on their liability to tax incurred in acting as trustees and the extent to which these may be validly limited or excluded, special tax rates for trusts and the available reliefs.
Despite the complex and extensive anti-avoidance measures which are a particular feature of the U.K. taxation system, non-resident trusts remain potentially flexible tools for U.K. resident non-domiciled individuals, whose foreign capital can be indefinitely protected from U.K. inheritance tax (by setting up an excluded property trust), as well as capital and income taxes where these are not remitted to the U.K. For global families whose future location is uncertain, trusts can be of exceptional benefit in planning across generations.
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