As we highlighted in our last newsletter on the Budget, certain measures to prevent tax avoidance related to trusts are being considered in conjunction with the Davis Tax Committee. These include issues such as tax free loans to trusts and income splitting amongst beneficiaries.
Nevertheless, the core objective of Trusts has always been centred around the principles of asset protection and wealth preservation, with an important focus on smooth asset transition from one generation to the next. The purpose and use of Trusts have never intentionally been rooted in tax avoidance as their principal objective.
In the right circumstances, we believe Trusts still have considerable relevance in estate planning.