Gifting

If you employ someone else to assist with the business you can claim their costs. This could include someone to assist with paperwork, e.g. your spouse/partner. If you are married and want to employ your spouse you have to ask Inland Revenue first or they may not let you claim their wages.

Any such payments must be reasonable for the work done. There may be PAYE obligations.

Record Keeping

When first set up, trusts have no assets.

They obtain assets by you selling them to the trust and the trust borrowing the money from you to buy them.

You then forgive the debt, often over several years.

While this debt remains, the assets of the trust (or some of them) are exposed to your liabilities. You should therefore try and complete your gifting as soon as possible.

Make sure your lawyer, accountant or yourself have a reliable system for reminding you to make the gifts. Otherwise the debt the trust owes you will remain outstanding for longer than necessary.

What Can the Trust Pay For?

Trusts exist to meet the needs of the beneficiaries. If the beneficiaries need food, clothes and similar, the trust can pay for them.

However there is not normally any benefit in having the trust pay for your children's food, rent etc.

If you do need cash out of the trust it's often easier to do this as a lump sum rather than have the trust pay for day to day living costs. That way you only have to document one amount rather than lots of small ones.

Next Step

Please contact us if you would like more information on how WHK can help you.  We are here to assist you in making those important decisions.

The information provided is of a general nature and is not intended to address the circumstances of any particular person or entity. Although we try to provide accurate and timely information, there is no guarantee that this information is accurate as of the date it is received.

No one should act on this information without appropriate professional advice after a thorough review of the particular situation. It is always important to ask your accountant's advice before you take action. It's almost always easier [and cheaper] to structure things properly upfront, as opposed to trying to fix something later.