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Trusts are one area of financial planning where our understanding and interpretation are all too often separated by a common language. One person’s idea of a trust and its purpose can differ vastly from another’s.

As one of the older tools of financial planning, trusts were initially established to safeguard a family or individual’s assets. As tax affairs became more complex, especially for wealthy families, trusts were increasingly used to help with tax planning – and in the process often came to be negatively associated with complex tax structuring.

Over a number of years, legislation has clamped down on several loopholes that enabled much of the negative tax structuring. While tax planning still forms a valid part of trust usage, to avoid elements such as double taxation for people spending time in different countries, modern-day trusts are yet again more widely used to preserve families’ assets for the benefit future generations.

Separated by a common language

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