Trust Funds for the Queen's Children and Grandchildren

[Hallo girl]

A very interesting thread.
I have a question, though.
The idea is that the Queen Mother put her money into trustfunds for her greatgrandchildren so that they would not have to pay deathduty over it. Correct? And that Queen Elisabeth II did the same.
But I wonder. Any interest the receipients recieved and bulk at the end, would count as income. And therefor be taxed for incometax. So, how high is incometax and compared to deathtax? There seems to be quite a difference, otherwise they would not go through such lenghts.

Tax is a very complex subject, I am sure the RF have the best advisors to hand to secure their wealth( legally) just as other wealthy people have. There are lots of legal ways to protect your wealth .

 

[Hallo girl]

Could I just add I will never need to delve in to it, it is not a problem for me. !!!!

 

[muriel]

A very interesting thread.
I have a question, though.
The idea is that the Queen Mother put her money into trustfunds for her greatgrandchildren so that they would not have to pay deathduty over it. Correct? And that Queen Elisabeth II did the same.
But I wonder. Any interest the receipients recieved and bulk at the end, would count as income. And therefor be taxed for incometax. So, how high is incometax and compared to deathtax? There seems to be quite a difference, otherwise they would not go through such lenghts.

It really depends on where the Trust is located. Often, they are based in tax friendly jurisdictions, and income tax received by the Trust may not be subject to tax. So as long as the income is held by the trust and reinvested, no income tax is payable. If a UK resident receives income from a Trust, that will be taxable at normal rates of income tax. That said, the primary objective of these tax structures is to avoid paying Inheritance Tax on the capital.

 

[tommy100]

It was put into trust as anything you give away doesn't incur inheritance tax in the UK so long as you live more than 7 years after giving it away. Its basically designed to stop you giving something away on your deathbed just to avoid paying inheritance tax.
While there will have been other benefits to a Trust I suspect the main benefit was that her great grandchildren were all children at the time so giving them millions of pounds would be tricky and giving it to their parents would mean inheritance tax could be charged again when they gave it to their children.
Trust do incur tax on earnings and assets as is described here:

Trusts and estates | Low Incomes Tax Reform Group

Trusts are more common than many people realise. They can be used to protect assets or simply hold assets on behalf of another person. Here we look at

www.litrg.org.uk

It is not impossible that the late Queen Mother used an offshore location for the Trust to minimise tax but then again personally I suspect that is doubtful and that it is based in the UK.