Book Review: Financial Planning with Trusts 2014-15 by John Woolley
Financial Planning with Trusts 2014-15 by John Woolley (published by Claritax Books, ISBN 9781908545565)
This third edition aims to be a “practical guide to the appropriate use of trusts for financial planning and asset protection” and it covers a very wide range of planning opportunities with much useful discussion of more general points such as trustee investment strategies. This will be a very handy guide for those who are new to such planning or who wish to develop their skills and understanding further in advising on this ever more complex area. Even the more accomplished may wish to check the finer points of some of the planning opportunities from time to time. It will be useful both to a lawyer and accountant or other similar professional, as it is aimed at anyone who advises clients on using trusts for financial planning.
There is a useful list of abbreviations at the very beginning so right from the start this book provides real practical assistance. The law is as at 1 August 2014 so although some areas, such as the now withdrawn Settlement Nil Rate Band and the taxation of pension lump sums will have already been overtaken, the majority is currently up to date. The focus is not on the question of tax avoidance being a “social evil” as per Lord Walker in the ‘Hastings – Bass’ appeals, but there is a brief overview of the General Anti-Avoidance Rule (GAAR), mainly based on HMRC’s April 2013 guidance notes. GAAR and the Disclosure of Tax Avoidance Schemes are discussed in more detail where appropriate in each planning chapter.
The introduction acknowledges that as clients want to utilise all available reliefs and exemptions while not completely giving away control of the asset, a trust can be used as a means of protecting the family’s wealth. Knowledge of trusts and when each are appropriate, or equally when they are not appropriate, is essential when giving a client estate or financial planning advice. There are many traps for the unwary and this book can guide the reader through them.
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After a review of why trusts might be used, the different types and the general taxation principles and the taxation of a particular investment held in trust, the book then turns to various particular planning scenarios. These include lifetime inheritance tax planning with cash and investments, lump sum inheritance tax plans, trusts for life assurance protection, trusts for business protection and succession and trusts of death benefits. There is a consideration of the benefits of undertaking the particular planning, which type of trust could be used in each scenario, the tax implications and potential advantages and disadvantages of such planning.
The more general use of trusts in Wills, deeds of variation, for the disabled and vulnerable, for gifts of houses and chattels, for shares in the family private trading company, excluded property trusts, offshore trusts and trusts to avoid probate are also covered in technical and practical detail. There is an overview of the contentious use of trusts in protecting assets from creditors and ex-spouses, with a more detailed look at the issue of reducing the costs of care on an individual. The effect of sham trusts and deliberate deprivation of assets are also discussed, along with the likely effect on planning in this area of the Care Act 2014.
The more specialist areas of personal injury trusts and facilitating adviser charging through investments in trusts are also covered. In fact very little is not covered: not employee benefit trusts, nor non trust-based vehicles such as family limited partnerships and family investment companies. Almost everything else trust-based that you can think of will be in this comprehensive book.
With tax law changing at an increasing pace and FATCA and other disclosure requirements evolving, it is to be hoped that a fourth edition will be available as soon as HMRC have finalised their ‘simplification’ of trusts and trusts have started to report under FATCA thus highlighting any ‘sticking’ points as the guidance given in this book is thorough and technical, but at the same time, highly practical. John’s skill as a tax consultant in giving technical yet practical advice in this complex area is obvious. This is a very useful book to have reference to whenever needed.
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