Trusts have a reputation problem. To some people they sound like tax avoidance; to others, like a magic wand. For a family that has built a construction business over decades, they are neither. They’re a tool — useful in specific situations, actively unhelpful in others.
What a trust is actually for
A trust separates control of an asset from outright ownership of it. For a family business that usually means one thing above all: passing value to the next generation without handing a teenager, or a fragile marriage, the keys to the whole company. The inheritance tax treatment matters, but control is often the real motive, and it’s worth being honest about that.
Where they genuinely help
- Holding shares that already qualify for Business Relief, so that value can move down a generation while keeping decision-making in steadier hands.
- Providing for family members who shouldn’t receive a lump sum outright — the young, the vulnerable, or simply the not-yet-ready.
- Creating a deliberate structure before a sale or a big change, rather than scrambling once a deal is on the table.
Where they don’t
If the plan is simply to shelter cash from tax with no other purpose, a trust is usually the wrong answer: the up-front and ongoing costs, the reporting, and the trustees’ duties rarely justify it. Business Relief already does a lot of heavy lifting for trading companies — and a trust can, if handled carelessly, put that relief at risk rather than protect it.
The honest summary
Trusts reward families who know why they’re using one. If you can’t say, in a sentence, what problem the trust solves that couldn’t be solved more simply, that’s usually a sign you don’t need it yet. Get the “why” right first; the structure follows.
Who's writing
I'm a senior manager at a UK accountancy firm, with a particular interest in construction and inheritance tax — and, off the clock, a parent of three under three. Carried Forward is where I write about money, work, and the decisions that shape both, in plain English and without the jargon.