HMRC have published a consultation document which would have wide repercussion for clients who have set up or are considering setting up several trusts on separate days.
Under the current rules each trusts is treated as having its own nil rate band which can generate substantial IHT savings.
As part of looking to simplify how the 10 Year Anniversary charge and the Exit charge are calculated for Relevant Property Trust, HMRC are looking to split the Nil Rate Band (£325,000 for 2013-14) equally between each trust.
We do not know yet from what date this might be introduced and whether there will be some transitional rules affecting existing trusts. All we know is that the changes would affect all existing trusts and new ones.
It may be useful to review the existing trusts and consider how the new changes would affect any trust which are being set up or considered ahead of any changes.