Business unit name goes here 11 Beneficiaries The beneficiaries are the individuals or groups of people named under the trust. These are often children or other family members. Depending upon the nature of the trust, it may also be possible to include future generations such as grandchildren as yet unborn. Chargeable Lifetime Transfer (CLT) A CLT is a transfer of value which is made by an individual and which is not an exempt or potentially exempt transfer. If the transfer exceeds the available nil-rate band of the transferor then a charge of 20% on the excess is payable. A transfer into a discretionary trust is a CLT. Discretionary trust A trust where the trustees use their discretion to decide who may benefit from the trust and when. The beneficiaries cannot demand their rights from the trustees. Estate Estate means all the assets that a person owns (or, in some cases, is treated as owning) at the time of their death, less their liabilities. Your estate will also include the value of any property you have given away if either the gift you have made is subject to conditions or restrictions, or you keep back some benefit for yourself. Exit charge If a CLT charge or 10-yearly periodic charge has given rise to a tax charge, an exit charge will be paid on any distributions made by the trustees out of the trust fund. The rate charged is dependent on the entry and 10-yearly periodic calculations but can never be greater than 6%. Nil-Rate Band The nil-rate band (NRB) is the value of an individual’s estate that is not chargeable to UK inheritance tax. The amount is set by the Government and is currently £325,000, which is frozen until 2026. Periodic charge Every ten years, the value of the trust less the available nil-rate band will be assessed for inheritance tax at a maximum rate of 6%. Second schedule The Lifestyle Trust deed is a document which includes four sections known as ‘schedules’, in which the provisions of the trust and its management are detailed. The Second Schedule is where the Settlor specifies the future entitlements they will receive and when they will be able to access them. Settlor The Settlor is the person or persons who sets up the initial investment. The Settlor(s) transfers the ownership of the assets to their chosen trustees. Trustee(s) The trustees are the legal owners of the assets, and manage the assets for the benefit of the beneficiaries. They are also responsible for dealing with the trust fund on the Settlor’s death. Glossary Trust registration A trust must register with HMRC’s Trust Registration Service if it is considered UK resident or has a UK tax liability, unless an exemption applies. – Trusts created before 1 September 2022 must register by the later of 1 September 2022 or within 90 days of the date of the trust deed. – Trusts created on or after 1 September 2022 must register within 90 days of the date of the trust deed. Further details regarding trust registration can be found here: platform.quilter.com/TrustRegister