We have recently been advised by our business banking providers that they will no longer accept cheque payments drawn in favour of payees other than our business name to our client account. This, as a firm which deals with Estate Administration, manages Trusts etc. is somewhat problematic, to say the least.
Who do people recommend as an alternative client account (therefore also office account) bank provider? We’re currently with Lloyds, and moved specifically to make use of the Client account functionality which we have now been advised they do not provide.
Many thanks. Have meeting with HSBC booked for this Thursday. Will advise if this is a successful discussion. Failing this, may well explore Metro Bank.
We moved from HSBC to Barclays when HSBC decided they did not want solicitors about 15 years ago and moved to Metro about two years ago when Barclays became useless. Metro are still learning about solicitors accounting rules and how we work but we have found them very responsive and I would recommend them as long as you are prepared to work with them when they are not quite sure.
My client has a discretionary trust with minor beneficiaries. Is it possible to appoint the income to the minors to avoid the 45% tax payment by the trust and the reclaim by the minor beneficiaries.
You can presumably appoint the income onto life interest for them. Make sure its revocable if you wish to avoid CGT problems.
Depending on the level of trust/beneficiary income there may be an absolute tax saving (as opposed to just an admin saving) if the trust produces dividends. The beneficiaries will be able to take advantage of their tax free divi allowance and also the lower tax rates on divis. If they are all non-taxpayers then this will not be in point, although it may be when they start earning.
If you can’t mandate the income you will still have to pay BR/divi tax in the trust which the beneficiaries may need to reclaim, but there is still a cash flow saving even if no admin/absolute tax saving.
You could appoint an interest in possession either revocably or for a limited time period and mandate the income. You would need to exclude s31 TA 1925. I should imagine that the level of income would need to justify the effort. You can’t control how much income goes to the minor; it will be whatever income is generated or their share of it. It can be an IIP in a specified investment of the trust or a discrete part of the trust fund. The income must be of such a nature that it is not taxed at source or paid first to the trustees or tax at 20% will be suffered by deduction or because the trustees have to pay it (as being in receipt of it: TSEM9310) and then the minor will have to make a repayment claim if the personal allowance covers it in whole or part: TSEM3040 and 3751. And see TSEM8375 for trust expenses and possible loss of a deduction… The minor may still have to make an SA return depending on the nature of the income and the amount(s).
