Estate Allocation Trust
For the family home. Preserves your Inheritance Tax reliefs, with no lifetime charges. Your home is transferred into a trust that you are a beneficiary of, so nothing changes about living there.
What an Estate Allocation Trust does
Inside the trust the value is divided between funds held on different terms: some of it absolutely for you, and one fund on discretionary terms capped so that it can never exceed the tax-free threshold.
The funds are not arbitrary. One holds an amount equal to the Residence Nil Rate Band, one the nil rate band itself, and a third whatever is left over. Only the middle one is genuinely settled, and it is capped so that it can never exceed the threshold at which charges would start. That cap is what keeps the tax at nil.
Where a couple set one up together, each of you has your own separate fund rather than the two being pooled, so you can each name different ultimate beneficiaries. That matters where there are children from an earlier marriage.
Your trustees hold the legal title, so the home can be dealt with straight away rather than waiting on a grant of probate.
It costs you nothing in tax
- Your Residence Nil Rate Band is preserved.
- No entry charge when the trust is made, no ten-yearly charge while it runs and no exit charge when assets leave it.
- No Capital Gains Tax, on the way in or during the time the home is held there, for as long as it goes on qualifying for main residence relief.
Its protection is narrower than a Family Asset Protection Trust, where the whole fund is discretionary: here only the nil rate band fund is settled, and the rest is held absolutely for you. In exchange you keep the Residence Nil Rate Band and avoid relevant property charges.
What it does not do
It does not save Inheritance Tax. You remain a beneficiary of your own trust, so the value stays inside your estate and is taxed there exactly as before. It is not protection against care fees.
Which is why it is not the right answer for everyone. If Inheritance Tax is already a problem, or likely to become one, this is the wrong starting point: it saves no tax of its own, and the fund inside it uses up nil rate band that other planning may need. Where that is the position we will say so, and look at what should be done first.
Prices
An Estate Allocation Trust is £4,495 at Standard and £5,995 at Premium for one person, and £5,495 and £7,295 for a couple. Every price is a total and includes the £1,000 legal drafting disbursement. See the full price list.
Your free review tells you whether a trust would help at all, and which one. It costs nothing and commits you to nothing.
Who you are dealing with
- Institute of Professional Willwriters member, under the only willwriting code approved by the Chartered Trading Standards Institute
- SRA-regulated solicitors draft all reserved documents
- Supervised by HMRC for the Money Laundering Regulations
- £2m professional indemnity and £2m public liability cover
- DBS checked staff, or equivalent
For complex tax or trust positions we refer to a STEP-qualified solicitor who is also a member of the Association of Lifetime Lawyers, and to chartered qualified accountants and chartered tax advisers.
