An exit charge on trusts is a fee that may be applied when the assets of a trust are distributed to its beneficiaries, or when the trust is terminated. The exit charge is calculated as a percentage of the value of the assets being distributed or transferred, and it is designed to recover any tax that has been deferred on the trust assets.

Exit charges on trusts are most commonly associated with discretionary trusts, which are often used for estate planning purposes. In these types of trusts, the trustee has the discretion to decide how and when the trust assets will be distributed to the beneficiaries. When the trustee decides to make a distribution, an exit charge may be applied to the value of the assets being distributed.

The current rate of exit charges on trusts in the UK is determined by the Finance Act 2016. The exit charge is calculated using a complex formula that takes into account the length of time that the trust has been in existence, the value of the assets being distributed, and the amount of any previous distributions made from the trust.