Book review: Tax Advisers Guide to Trusts 6th ed.

 In Book Reviews for Private Client practitioners

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Tax Advisers’ Guide to Trusts (6th edition) by Eastaway, Kimber & Richards, published by Bloomsbury Professional  |  ISBN 9781526511799

Book review Tolleys Taxwise IIThis text is aimed at tax practitioners, many of whom will not be lawyers. Over 300 pages of the book contains extracts from legislation. Given the http://www.legislation.gov.uk contains much legislation on the internet perhaps this is excessive.

It is however, first and foremost, a practitioner’s book.  There is an assumption of general tax knowledge relating to the computation of income and gains for self-assessment purposes so that the text can focus on the tax treatment of trustees, settlors, and beneficiaries.

The law is as stated at 30 September 2019.

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Purpose

Despite the fact that trusts have been used for wealth management for centuries tax advisers and lawyers do admit that they struggle to feel confident in practice with the concept and taxation of trusts. This book’s stated purpose is to demystify the subject and explain the tax rules and the way in which trusts can be used in practice as a flexible and effective means of wealth accumulation and protection in an uncertain world.

Content

The book is arranged over 19 Chapters. Chapters 1-4  include some basic background to trusts and trustees’ powers and duties. Chapters 6 – 9 examine the main types of private trusts and the taxation rules applicable to trusts – something which many practitioners  say are their biggest headache. Chapters 5 on residence and domicile and 10 on foreign trusts spreads the appeal of the book to a wider audience not just those dealing with UK taxpayers.

Chapter 11 deals with charitable trusts and chapter 12 with purpose and heritage trusts and foundations. Chapters 13, 14, 16 and 18 deal with specialist areas – protective and vulnerable person trusts; asset protection trusts; employee trusts and pension funds.

There are helpful chapters too on Wills, trusts and statutory trusts (chapter 15) and on trusts of land (chapter 17).

Chapter 19 examines the trust tax return.

There are 10 Appendices which contain various pieces of legislation, regulations and conventions together with tax tables and the STEP provisions.

Structure & Layout

The structure of the book is such that it will be a manual which the practitioner will dip into as and when research on a particular point is required. Each chapter has clearly defined sub-sections and the layout is by numbered paragraph for ease of use.

As you might expect, chapter 6 on the Main Taxation Rules Applicable to Trusts runs to over 130 pages and perhaps would have benefitted from breaking up into different taxes. Towards the end of the chapter there is a section on retrospective anti-avoidance legislation.

The chapters on relevant property trusts, bare and interest in possession trusts and trusts for children and young adults will get particularly well-thumbed. They contain useful worked examples.

Tools

There are no quick job aids in this book – it is not that sort of book. The key tool is providing useful advice throughout on where tax savings might be achieved as well as worked examples of how to calculate certain taxable events during the life of different trusts. Chapter 19 is itself a commentary on how to deal with HMRC and engage in the whole process of returning income and gains on the SA900, which is reproduced in the text.

Clarity & readability

Whilst the text is dense and slightly off-putting, once the reader has adjusted to the detail this text is usefully clear on some particularly difficult tax issues. The cross-referencing is well incorporated into the text. For example, in chapter 19 on the trust tax return there is a paragraph dealing with taking a different view to that put out by HMRC. The example given is that of the view of HMRC on the Settlements Legislation. It says:

“The Veltema judgment does not require the provision of enough information to quantify the effect on the elf-assessment.

Provided the point at issue is clearly identified and the stance adopted is not wholly unreasonable the existence of an insufficiency can be assumed. It is not necessary to provide all the documentation that the inspector might need to quantify that insufficiency if he chose to enquire into the return. In these circumstances the taxpayer achieves finality if no enquiry is opened within the twelve month time limit.”

This gives the practitioner a clear steer as to how to proceed.

Relevance to practitioners

The text is well researched with references to many key cases and legislation. It also contains some helpful worked examples. It is a useful text to have on your bookshelf even if its very size is daunting.

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