Martina asks:

I've recently found out about 'Family Partnerships' and research on the internet shows me that this seems to be just what I need to preserve my assets, particularly as I wish to support one of my sons in developing a business (which I see is what seems to be a condition of a family partnership).

Why is there not much on the web about it? Is it not popular? Does it have any downside? And how does it compare with an excluded property trust given that Gordon Brown had been launching attacks on trusts?

There has been a lot of negative press about trusts in recent years and this has left many individuals thinking that they are disliked by HM Revenue & Customs or no longer effective tax planning or asset protection tools. However, the fact is that very few of the 'anti-trust' measures introduced by the Government have had a direct impact on the effectiveness of most medium sized family trusts.

The Family Limited Partnership came to the fore in 2006 when Gordon Brown introduced his first anti-trust budget and arose out of fears about what the changes meant to family trusts. Whilst they are useful in some circumstances, they are really only suitable when the initial sum being transferred is in cash and all the beneficiaries are over 18. If the amount you are considering transferring to your son is less than £325,000 (£650,000 if you're married) and/or non-cash assets, and you wish to retain a measure of control, then a trust structure will most likely remain the best vehicle. Excluded property trusts are a particular type of trust relevant only to individuals who are non-UK domiciled, who do not have to pay UK inheritance tax on assets situated abroad.

Back to Questions »