What are the advantages of using BR over a trust?
Despite popular opinion, the tax advantages that a trust offers have been steadily reduced by successive Governments over the past few decades. In 2006, the Government announced reforms which meant that many assets that moved into trusts became subject to a 20% IHT levy. Not only that, in 2016, the government increased the income tax rate for dividends held in trusts and removed a 10% tax credit.
As a result, many advisers believe that families are going to lean towards a different approach to managing their inheritances via a trust.
As well as being able to obtain IHT relief up to five years faster than trusts, IHT planning using BR also offers investors greater security, does not take away control from their estate, and also provides plenty of flexibility to the client. By mitigating several layers of risk, BR can be seen as the safer option for less experienced investors.