Advantages of Charitable Trusts

Most commonly, trusts are established with the intention of safeguarding assets for either the settlor (that is, the individual establishing the trust) or for their potential beneficiaries or dependants. These beneficiaries do not, however, necessarily need to be related to or dependant upon the settlor. Rather, trusts also offer a chance to commit to tax efficient charitable giving.
Charitable trusts can be established by anyone who wishes to dedicate a portion of their assets to charity. The total amount of these assets is unimportant; charitable trusts can be established with any amount. Similarly, the terms of the trust can be worded in such a way as to ensure that the assets are either spread amongst different charitable organisations, or dedicated only to one.
Tax Status
Perhaps the most obvious advantage of a charitable trust is its tax status. Any such trust is treated, for tax purposes, as a charity in and of itself. As a result, it is possible to secure significant tax exemptions. In the first instance, all donations made to the trust (that is, all assets transferred into it) will be eligible for full tax relief. This continues into any investment income that is earned by the trust.If, for example, it is deemed beneficial for the trust to invest some of its assets in order to produce a greater return, no tax will be payable on that investment income. Similarly, although charitable trusts can also be constituted as companies, no corporation tax will apply. Further down the line, if the trust is eventually required to operate from its own office space, it will be similarly exempt from business rates.
Framework
On a more personal level, charitable trusts are advantageous in that they provide an opportunity for individuals to give some structure to their giving. A well-planned trust, almost regardless of the amount being donated, will help to give some sense that your assets are being put to constructive use. Furthermore, establishing this sort of framework for giving helps many people to donate more effectively; rather than sporadic bursts of charitable giving, a trust can help to give some direction to your charitable activities.Anonymity
Another key advantage for many people is the anonymity offered by charitable trusts. If you are giving as an individual, your name will almost certainly be attached to the donation. Becoming disassociated from these donations, particularly if they are large, can be difficult. A charitable trust offers the opportunity to make donations without ever being personally identified or associated.On the other hand, however, a charitable trust can also provide an opportunity to give a cohesive identity to a collection of donors or donations. The settlor need not be the only donor and, as such, a well-named charitable trust can help to foster a sense of community and cooperation amongst givers.
Charitable trusts are potentially very useful, and are relatively simple to establish. The articles throughout the rest of this section help to explain the process of setting up your own charitable trust, and some of the factors that must be considered.
Re: Can Conditions Be Put Into Adult Children's Trust Funds?
Hi, can you help. my father was killed in a road accident in October 1966. My grandfather…
Re: Reasons for Establishing a Living Trust
are there any inheritance tax ramifications when creating a 'living trust'.
Re: What is Absolute Entitlement?
My mother’s will has the word absolutely after each beneficiary name. My sister has died since but the estate has been delayed…
Re: Implied and Express Trusts
My father (ZML) and stepmother (JNL) wrote joint wills which each contained a testamentary trust. I was named executor and trustee.…
Re: How to Trace Whereabouts of Trust Funds?
Hello i am trying to locate a trust that i think my mother is hiding from me
Re: How to Trace Whereabouts of Trust Funds?
Hello i am trying to locate a trust that my mother is hiding from me
Re: How to Trace Whereabouts of Trust Funds?
My father left my son a trust fund for him, he is now 27 years old, my father died in the year of 2000. How do I…
Re: How to Trace Whereabouts of Trust Funds?
Hi there can you help me locate a trust fund for the Kelly-Sporle family, it was meant to go to my dad but he…
Re: What are Trustees and Beneficiaries?
I am a named beneficiary in a life insurance trust policy and I was claimed by my trustee. The trustee asked the…
Re: What is a Charitable Trust?
Seek the forms to fill out for a Chairatable Trust