Estate Planning Our Trusts Controlled Access Account Generations 1360X784

Controlled Access Trust

Passing on your wealth to a child

How the trust works

A trust is a way of managing assets (such as money or investments). They are legal arrangements where someone (the donor) puts assets into a trust and appoints a person or group of people (the trustees) to look after the assets for the benefit of a person or group of people (the beneficiaries). There are different types of trusts, which have different features and benefits.

Our Controlled Access Trust

Setting up the trust

Set up the Controlled Access trust with a lump sum, for the benefit of a child. The child beneficiary is entitled to 99% of the investment and an adult beneficiary is entitled to the remaining 1%.                    

Payments to the child before they’re 18

The trustees have the flexibility to choose whether to make yearly maturity payments to the child before their eighteenth birthday. Once the child is 18, this flexibility stops. The trustees should therefore decide, before this time, the age that the child can receive any remaining investment. This can be anytime up until the age of 49.

Accessing your money

With a Controlled Access Account, you cannot receive any money from the investment. Therefore, this trust is only suitable if you’re certain that you want to give your entire investment to the child beneficiary.

A bare trust

This is a bare trust for a named child and adult, which allows the trustees to control access to the investment. With a bare trust you cannot change the beneficiaries, so you’ll need to be certain about who you choose.

Tax

Income tax

If flexible yearly maturity payments are taken, income tax might need to be paid. The person who needs to pay any income tax would normally be the child and/or adult beneficiary. However, if you’re the parent of the child who’s under 18, then any income tax would fall on you and/or the adult beneficiary.

Inheritance tax

When the investment’s been in the trust for seven years, it moves outside of the estate, so there’s no inheritance tax to pay on it. 

For more information on tax, please speak with your adviser.

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