Mixed Trusts are trusts that are a combination of different types of trusts. They are taxed differently and per the individual tax rules that apply to each part of the mixed-trust.
These products can become complicated due to the:
a). Changes in the trusts tax law;
b). The complexity of the tax laws in different jurisdictions;
c). The raising of tax standards in the particular jurisdiction in comparison to some; and
d). The need for a specific type of personnel or skills to administer, to name but a few.
There are advantages to this type of set up as it allows for:
a). Economies of scale, you can practically bring two trusts together in one product, a good example has a mixed-trust that is partly discretionary and partly an interest in possession trusts;
b). You can effectively bring together activities that are different, which might result in the reduction in the tax bill in some instances, although this can have an opposite effect as seen in the Joint impact of Balfour & dance [HMRC v Trustees of Nelson Dance Family settlement (2008) spc682] ;
c). They can be used to consolidate or move one generation assets to another;
d). They can sometimes increase the value of the trusts although, in some instances, this might result in a reduction of the value of the assets, and
e). Depending on the mix-up, special tax rates can be taken advantage of, which can result in the reduction of the overall tax bill, to name but a few.
The overall contributions to the trust market:
Like all trusts, the mixed trusts can result in the overall expansion of the trust's market due to employment creation, changes in taxation laws, changes in regulatory requirements and the growth overall of the economy as a whole. They also help families of all shapes and sizes be able to plan, manage and administer their affairs. They also help empower individuals giving them the right to choose how they want to get this done. Giving individuals the right of choice helps them with their consumer rights. The helping of families increases not only the trusts market but also the consumer market. They also help philanthropists to be able to give to their beneficiaries effectively and efficiently, resulting in the expansion of the trust's market. They also allow for international, cross-border trusts to be administered, resulting in the growth of international markets.
Jumleap Estates & Wills Planning Private Limited, confirms that nothing stated on this article constitutes advice on which you should rely. Our blog articles are for general information purposes only. Professional or specialist advice should always be sought before taking any action relating to any views, issues or matters discussed. Jumleap Estates & Wills Planning Private Limited will not be held responsible for any action taken as a result of this article.