You may have heard in the budget last week that the trustee tax rate is rising from 33% to 39% from 1 April 2024.

Although this may be concerning for some, it’s worthwhile remembering that many trusts don’t earn income, so they are not affected by the proposed tax rate change. They simply don’t have any income to tax. 

Many trusts distribute their income to beneficiaries each year and pay tax at that level. So, it’s only those trusts that took advantage of the lower tax rate for trustees to keep income in the trust, pay tax there, and distribute it later, that will be affected by this change.

Business risk/creditor protection is usually the key motivation for holding assets in a trust and you can rest assured that the Government’s proposed change to the trustee tax rate won’t affect those benefits.

If you’re concerned about what this means for you, get in touch with our Trust team. We’re here to help you.

When was the last time you took your trust for a Warrant of Fitness? Give our free online ‘Trust WOF’ test a go and see who your trust fares!

Steph Gifford, Senior Associate.