Glossary

Discretionary Trust

A trust where trustees decide which beneficiaries from a defined class receive what, and when. Used for asset protection, vulnerable beneficiaries, and IHT planning.

A Discretionary Trust gives trustees flexibility about who, within a class of beneficiaries, receives what and at what time. The flexibility is what makes the trust useful for protecting assets, supporting beneficiaries with changing circumstances, or managing Inheritance Tax exposure.

Discretionary Trusts have their own tax regime, including periodic and exit charges. Used well, they can be very tax-efficient; used poorly, they can be expensive.

Related terms

Other terms that come up alongside this one.

Trust
A legal arrangement where one person (the trustee) holds assets for the benefit of another (the beneficiary).
Trustee
A person who holds assets in trust for someone else.
Inheritance Tax (IHT)
A tax charged at 40% on the value of an estate over the nil-rate band (currently £325,000 per person), with various reliefs and exemptions.

Related services

Where discretionary trust matters in our work.

Trusts
Trusts can protect assets for vulnerable beneficiaries, ring-fence money for grandchildren, reduce IHT exposure or keep wealth in the family across generations.
Inheritance Tax planning
With careful planning, much of an estate can be passed on without an unnecessary tax bill. We work with you, and your other advisers where helpful, to plan properly.

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