When looking at clause 5, it is stated, “Subject to the above, I give the residue of my estate to my trustees to hold the same on trust after the payment of my debts, funeral and testamentary expenses on trust to pay or apply the income and capital thereof to or for the purposes and benefit of such independent fee-charging schools within the County of Hampshire and in such sums and at such times and in such manner as my Trustees...
When looking at clause 5, it is stated, “Subject to the above, I give the residue of my estate to my trustees to hold the same on trust after the payment of my debts, funeral and testamentary expenses on trust to pay or apply the income and capital thereof to or for the purposes and benefit of such independent fee-charging schools within the County of Hampshire and in such sums and at such times and in such manner as my Trustees in their absolute discretion think fit. It’s important to ascertain whether this will be a charitable trust or a non-charitable trust, as there are different tax rules for both of them. Non-charitable trusts are used primarily to avoid inheritance tax. If you put more than the Nil Rate Band (Around £3250,000), then the remaining mone on top of that will be taxed at 20%. With regards to a charitable trust, the value of this trust will not be subject to inheritance tax. Looking at future implications for non-charitable tax, any money made from the non-charitable trust will be taxed just like you or I will be taxed on our incomes. With regards to a charitable trust, the income coming from the trust, will not be taxed if the income is solely used for the trust. For example, if you called your charity Hampshire Schools Charity, then the income from this charity must be put back into the charity and used for its purpose.
