AAS Blog

Benefits of gifting or lending money to a Trust

January 2023

When Trustees contribute funds to a Trust (usually when they are establishing the Trust or when the year end accounts have been finalised) a common question that Trustees ask is whether the additional funds should be lent or gifted to the Trust. The answer is that it depends, and is different for each person based on their personal circumstances.

When money is gifted to a trust, the money becomes the property of the trust and is controlled by the Trustees. Whilst money that is lent to the Trust by the Trustees (and accepted by the trust) creates a legal right for the Trust to repay the funds back to the borrower i.e. the Trustees.

The decision as to whether Trustees prefer to lend or gift money to a Trust is therefore affected by their own preferences towards asset protection, estate planning and income tax.

To read the full article click on the link below.

Gifting or Lending Money to a Trust – What is the difference?

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