Trusts and taxes

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1. Overview

A trust is a way of managing assets (money, investments, land or buildings) for people. There are different types of trusts and they are taxed differently.

Trusts involve:

  • the ‘settlor’ - the person who puts assets into a trust
  • the ‘trustee’ - the person who manages the trust
  • the ‘beneficiary’ - the person who benefits from the trust

This guide is also available in Welsh (Cymraeg).

What trusts are for

Trusts are set up for a number of reasons, including:

  • to control and protect family assets
  • when someone’s too young to handle their affairs
  • when someone cannot handle their affairs because they’re incapacitated
  • to pass on assets while you’re still alive
  • to pass on assets when you die (a ‘will trust’)
  • under the rules of inheritance if someone dies without a will (in England and Wales)

What the settlor does

The settlor decides how the assets in a trust should be used - this is usually set out in a document called the ‘trust deed’.

Sometimes the settlor can also benefit from the assets in a trust - this is called a ‘settlor-interested’ trust and has special tax rules. Find out more by reading the information on different types of trust.

What trustees do

The trustees are the legal owners of the assets held in a trust. Their role is to:

  • deal with the assets according to the settlor’s wishes, as set out in the trust deed or their will
  • manage the trust on a day-to-day basis and pay any tax due
  • decide how to invest or use the trust’s assets

If the trustees change, the trust can still continue, but there always has to be at least one trustee.

Beneficiaries

There might be more than one beneficiary, like a whole family or defined group of people. They may benefit from:

  • the income of a trust only, for example from renting out a house held in a trust
  • the capital only, for example getting shares held in a trust when they reach a certain age
  • both the income and capital of the trust

If you need help

Contact a legal adviser or tax adviser. They can also talk to HM Revenue and Customs (HMRC) on your behalf if you give them permission.

You can also get help from the Society of Trust and Estate Practitioners.

2. Types of trust

The main types of trust are:

  • bare trusts
  • interest in possession trusts
  • discretionary trusts
  • accumulation trusts
  • mixed trusts
  • settlor-interested trusts
  • non-resident trusts

Each type of trust is taxed differently. Trusts involve a ‘trustee’, ‘settlor’ and ‘beneficiary’.

Bare trusts

Assets in a bare trust are held in the name of a trustee. However, the beneficiary has the right to all of the capital and income of the trust at any time if they’re 18 or over (in England and Wales), or 16 or over (in Scotland). This means the assets set aside by the settlor will always go directly to the intended beneficiary.

Bare trusts are often used to pass assets to young people - the trustees look after them until the beneficiary is old enough.

Example

You leave your sister some money in your will. The money is held in trust.

Your sister is entitled to the money and any income (for example interest) it earns. She can also take possession of any of the money at any time.

Interest in possession trusts

These are trusts where the trustee must pass on all trust income to the beneficiary as it arises (less any expenses).

Example

You create a trust for all the shares you owned.

The terms of the trust say that when you die, the income from those shares go to your wife for the rest of her life. When she dies, the shares will pass to your children.

Your wife is the income beneficiary and has an ‘interest in possession’ in the trust. She does not have a right to the shares themselves.

Discretionary trusts

These are where the trustees can make certain decisions about how to use the trust income, and sometimes the capital.

Depending on the trust deed, trustees can decide:

  • what gets paid out (income or capital)
  • which beneficiary to make payments to
  • how often payments are made
  • any conditions to impose on the beneficiaries

Discretionary trusts are sometimes set up to put assets aside for:

  • a future need, like a grandchild who may need more financial help than other beneficiaries at some point in their life
  • beneficiaries who are not capable or responsible enough to deal with money themselves

Accumulation trusts

This is where the trustees can accumulate income within the trust and add it to the trust’s capital. They may also be able to pay income out, as with discretionary trusts.

Mixed trusts

These are a combination of more than one type of trust. The different parts of the trust are treated according to the tax rules that apply to each part.

Settlor-interested trusts

These are where the settlor or their spouse or civil partner benefits from the trust. The trust could be:

  • an interest in possession trust
  • an accumulation trust
  • a discretionary trust

Example

You can no longer work due to illness. You set up a discretionary trust to make sure you have money in the future.

You’re the settlor - you may also benefit from the trust because the trustees can make payments to you.

Non-resident trusts

This is a trust where the trustees are not resident in the UK for tax purposes. The tax rules for non-resident trusts are very complicated.

3. Parental trusts for children

These are trusts set up by parents for children under 18 who have never been married or in a civil partnership. They’re not a type of trust in their own right but will be either:

  • a bare trust
  • an interest in possession trust
  • an accumulation trust
  • a discretionary trust

Read the information on types of trust to find out more.

Income Tax

Income Tax on income from the trust is paid by the trustees, but the ‘settlor’ is responsible for it. This means:

  1. The trustees pay Income Tax on the trust income by filling out a Trust and Estate Tax Return.

  2. They give the settlor a statement of all the income and the rates of tax charged on it.

  3. The settlor tells HM Revenue and Customs (HMRC) about the tax the trustees have paid on their behalf when filling out their Self Assessment tax return.

4. Trusts for vulnerable people

Some trusts for disabled people or children get special tax treatment. These are called ‘trusts for vulnerable beneficiaries’.

Who qualifies as a vulnerable beneficiary

A vulnerable beneficiary is either someone under 18 whose parent has died or a disabled person who is eligible for any of the following benefits (even if they do not receive them):

A vulnerable beneficiary can also be someone who is unable to manage their own affairs because of a mental health condition - check with a medical professional that it’s covered by the Mental Health Act 1983.

Trusts that qualify for special tax treatment

A trust does not qualify for special Income Tax treatment if the person setting it up can benefit from the trust income. However, from 2008 to 2009 it would qualify for special Capital Gains Tax treatment.

Trusts for children who’ve lost a parent are usually set up by the parent’s will, or by special rules of inheritance if there’s no will.

If someone dies without a will in Scotland, a trust set up there for their children is usually treated as a bare trust for tax purposes.

If there’s more than one beneficiary

If there are beneficiaries who are not vulnerable, the assets and income for the vulnerable beneficiary must be:

  • identified and kept separate
  • used only for that person

Only that part of the trust gets special tax treatment.

Claiming special tax treatment

To claim special treatment for Income Tax and Capital Gains Tax, the trustees have to fill in the ‘Vulnerable Person Election’ form.

If there’s more than one vulnerable beneficiary, each needs a separate form.

The trustees and beneficiary must both sign the form.

If the vulnerable person dies or is no longer vulnerable, the trustees must tell HMRC.

Income Tax

In a trust with a vulnerable beneficiary, the trustees are entitled to a deduction of Income Tax. It’s calculated like this:

  1. Trustees work out what their trust Income Tax would be if there was no claim for special treatment - this will vary according to which type of trust it is.

  2. They then work out what Income Tax the vulnerable person would have paid if the trust income had been paid directly to them as an individual.

  3. They can then claim the difference between these 2 figures as a deduction from their own Income Tax liability.

This is a complicated calculation but there’s a detailed worked example on the HMRC website.

Capital Gains Tax

Capital Gains Tax may be due if assets are sold, given away, exchanged or transferred in another way and they’ve gone up in value since being put into trust.

Tax is only paid by trustees if the assets have increased in value above the the trust’s tax-free allowance (called the ‘annual exempt amount’).

For the 2024 to 2025 tax year, the tax-free allowance for trusts is:

  • £3,000 for vulnerable beneficiaries
  • £1,500 for other trustees

You can see the tax-free allowance for previous tax years.

Trustees are responsible for paying any Capital Gains Tax due. If the trust is for vulnerable people, trustees can claim a reduction, which is calculated like this:

  1. They work out what they would pay if there was no reduction.

  2. They then work out what the beneficiary would have to pay if the gains had come directly to them.

  3. They can claim the difference between these 2 amounts as a reduction on what they have to pay in Capital Gains Tax using form SA905.

This special Capital Gains Tax treatment does not apply in the tax year when the beneficiary dies.

Inheritance Tax

These are the situations when trusts for vulnerable people get special Inheritance Tax treatment:

  • for a disabled person whose trust was set up before 8 April 2013 - at least half of the payments from the trust must go to the disabled person during their lifetime
  • for a disabled person whose trust was set up on or after 8 April 2013 - all payments must go to the disabled person, except for up to £3,000 per year (or 3% of the assets, if that’s lower), which can be used for someone else’s benefit
  • when someone who has a condition that’s expected to make them disabled sets up a trust for themselves
  • for a bereaved minor - they must take all the assets and income at (or before becoming) 18

There’s no Inheritance Tax charge:

  • if the person who set up the trust survives 7 years from the date they set it up
  • on transfers made out of a trust to a vulnerable beneficiary

When the beneficiary dies, any assets held in the trust on their behalf are treated as part of their estate and Inheritance Tax may be charged.

Trusts usually have 10-year Inheritance Tax charges, but trusts with vulnerable beneficiaries are exempt.

5. Trusts and Income Tax

Most trusts do not pay Income Tax on income up to a tax-free amount (normally £500). Tax is due on the full amount if the income is more than the tax-free amount.

Trustees do not qualify for the dividend allowance.

Different types of trust income have different rates of Income Tax.

Each type of trust is taxed differently. Trusts involve a ‘trustee’, ‘settlor’ and ‘beneficiary’.

Accumulation or discretionary trusts

Trustees are responsible for paying tax on income received by accumulation or discretionary trusts.

If the settlor has more than one accumulation or discretionary trust, the £500 tax-free limit is divided by the number of accumulation or discretionary trusts they have.

If the settlor has set up 5 or more accumulation or discretionary trusts, the limit for each trust is £100.

The tax rates are below.

Type of income Tax rate
Dividend-type income 39.35%
All other income 45%

The tax rate for income used to pay qualifying trust management is 8.75% for dividend income and 20% for other income. Find out about taxable items, tax pools and deductions for trusts and Income Tax.

Interest in possession trusts

The trustees are responsible for paying Income Tax at the rates below.

Type of income Income Tax rate
Dividend-type income 8.75%
All other income 20%

Sometimes the trustees ‘mandate’ income to the beneficiary. This means it goes to them directly instead of being passed through the trustees.

If this happens, the beneficiary needs to include this on their Self Assessment tax return and pay tax on it.

Bare trusts

If you’re the beneficiary of a bare trust you’re responsible for paying tax on income from it.

You need to tell HMRC about the income on a Self Assessment tax return. The £500 tax-free limit for trusts does not apply, but you may be able to use your Personal Allowance.

If you do not usually send a tax return, you need to register for self-assessment by 5 October following the tax year you had the income.

Settlor-interested trusts

The settlor is responsible for Income Tax on these trusts, even if some of the income is not paid out to them. However, the Income Tax is paid by the trustees as they receive the income.

  1. The trustees pay Income Tax on the trust income by filling out a Trust and Estate Tax Return.

  2. They give the settlor a statement of all the income and the rates of tax charged on it.

  3. The settlor tells HMRC about the tax the trustees have paid on their behalf on a Self Assessment tax return.

The rate of Income Tax depends on what type of trust the settlor-interested trust is.

Other types of trust

There are special tax rules for parental trusts for children, trusts for vulnerable people and trusts where the trustees are not resident in the UK for tax purposes. These are called non-resident trusts.

If you’re the beneficiary

Depending on the type of trust and your income, you might be able to claim some of the Income Tax back.

If you’re the trustee

Get help completing the Trust and Estate Tax return.

If you need more help

There’s more detailed guidance on trusts and Income Tax.

Contact HMRC or get professional tax advice if you need help.

6. Trusts and Capital Gains Tax

Capital Gains Tax is a tax on the profit (‘gain’) when something (an ‘asset’) that’s increased in value is taken out of or put into a trust.

When Capital Gains Tax might be payable

If assets are put into a trust

Tax is paid by either the person:

  • selling the asset to the trust
  • transferring the asset (the ‘settlor’)

If assets are taken out of a trust

The trustees usually have to pay the tax if they sell or transfer assets on behalf of the beneficiary.

There’s no tax to pay in bare trusts if the assets are transferred to the beneficiary.

Sometimes an asset might be transferred to someone else but Capital Gains Tax is not payable. This happens when someone dies and an ‘interest in possession’ ends.

A beneficiary gets some or all of the assets in a trust

Sometimes the beneficiary of a trust becomes ‘absolutely entitled’ and can tell the trustees what to do with the assets, for example when they reach a certain age.

In this case, the trustees pay Capital Gains Tax based on the assets’ market value when the beneficiary became entitled to them.

Non-UK resident trusts

The rules for Capital Gains Tax on non-UK resident trusts are complicated. You can get help with your tax.

Working out total gains

Trustees need to work out the total taxable gain to know if they have to pay Capital Gains Tax.

Allowable costs

Trustees can deduct costs to reduce gains, including:

  • the cost of the property (including any administration fees)
  • professional fees, for example for a solicitor or stockbroker
  • the cost of improving property or land to increase its value, for example building a conservatory (but not repairs or regular maintenance)

Tax reliefs

Trustees might be able to reduce or delay the amount of tax the trust pays if gains are eligible for tax relief.

Relief Description
Private Residence Relief Trustees pay no Capital Gains Tax when they sell a property the trust owns. It must be the main residence for someone allowed to live there under the rules of the trust.
Business Asset Disposal Relief Trustees pay 10% Capital Gains Tax on qualifying gains if they sell assets used in a beneficiary’s business, which has now ended. They may also get relief when they sell shares in a company where the beneficiary had at least 5% of shares and voting rights.
Hold-Over Relief Trustees pay no tax if they transfer assets to beneficiaries (or other trustees in some cases). The recipient pays tax when they sell or dispose of the assets, unless they also claim relief.

Tax-free allowance

Trustees only have to pay Capital Gains Tax if the total taxable gain is above the trust’s tax-free allowance (called the ‘annual exempt amount’).

For the 2024 to 2025 tax year, the tax-free allowance for trusts is:

If there’s more than one beneficiary, the higher allowance may apply even if only one of them is vulnerable.

See tax-free allowances for previous tax years.

The tax-free allowance may be reduced if the trust’s settlor has set up more than one trust (‘settlement’) since 6 June 1978.

There’s more detailed information about Capital Gains Tax and Self Assessment for trusts.

Report gains to HMRC

Trustees must report and pay any tax due on UK residential property using a Capital Gains Tax on UK property account. They must do this within:

  • 60 days of selling the property if the completion date was on or after 27 October 2021
  • 30 days of selling the property if the completion date was between 6 April 2020 and 26 October 2021

Trustees must report the sale or transfer of other assets in a trust and estate Self Assessment tax return.

Download and fill in a Trust and Estate Tax Capital Gains form (SA905) if you’re a trustee sending a tax return by post.

The rules are different for reporting a loss.

If you need more help

There’s more detailed guidance on Capital Gains Tax.

Contact HMRC or get professional tax advice if you need help.

7. Trusts and Inheritance Tax

Inheritance Tax may have to be paid on a person’s estate (their money and possessions) when they die.

Inheritance Tax is due at 40% on anything above the threshold - but there’s a reduced rate of 36% if the person’s will leaves more than 10% of their estate to charity.

Inheritance Tax can also apply when you’re alive if you transfer some of your estate into a trust.

When Inheritance Tax is due

The main situations when Inheritance Tax is due are:

What you pay Inheritance Tax on

You pay Inheritance Tax on ‘relevant property’ - assets like money, shares, houses or land. This includes the assets in most trusts.

There are some occasions where you may not have to pay Inheritance Tax - for example where the trust contains excluded property.

Special rules

Some types of trust are treated differently for Inheritance Tax purposes.

Bare trusts

These are where the assets in a trust are held in the name of a trustee but go directly to the beneficiary, who has a right to both the assets and income of the trust.

Transfers into a bare trust may also be exempt from Inheritance Tax, as long as the person making the transfer survives for 7 years after making the transfer.

Interest in possession trusts

These are trusts where the beneficiary is entitled to trust income as it’s produced - this is called their ‘interest in possession’.

On assets transferred into this type of trust before 22 March 2006, there’s no Inheritance Tax to pay.

On assets transferred on or after 22 March 2006, the 10-yearly Inheritance Tax charge may be due.

During the life of the trust there’s no Inheritance Tax to pay as long as the asset stays in the trust and remains the ‘interest’ of the beneficiary.

Between 22 March 2006 and 5 October 2008:

  • beneficiaries of an interest in possession trust could pass on their interest in possession to other beneficiaries, like their children
  • this was called making a ‘transitional serial interest’
  • there’s no Inheritance Tax to pay in this situation

From 5 October 2008:

  • beneficiaries of an interest in possession trust cannot pass their interest on as a transitional serial interest
  • if an interest is transferred after this date there may be a charge of 20% and a 10-yearly Inheritance Tax charge will be payable unless it’s a disabled trust

If you inherit an interest in possession trust from someone who has died, there’s no Inheritance Tax at the 10-year anniversary. Instead, 40% tax will be due when you die.

If the trust is set up by a will

Someone might ask that some or all of their assets are put into a trust. This is called a ‘will trust’.

The personal representative of the deceased person has to make sure that the trust is properly set up with all taxes paid, and the trustees make sure that Inheritance Tax is paid on any future charges.

If the deceased transferred assets into a trust before they died

If you’re valuing the estate of someone who has died, you’ll need to find out whether they made any transfers in the 7 years before they died. If they did, and they paid 20% Inheritance Tax, you’ll need to pay an extra 20% from the estate.

Even if no Inheritance Tax was due on the transfer, you still have to add its value to the person’s estate when you’re valuing it for Inheritance Tax purposes.

Trusts for bereaved minors

A bereaved minor is a person under 18 who has lost at least one parent or step-parent. Where a trust is set up for a bereaved minor, there are no Inheritance Tax charges if:

  • the assets in the trust are set aside just for bereaved minor
  • they become fully entitled to the assets by the age of 18

A trust for a bereaved young person can also be set up as an 18 to 25 trust - the 10-yearly charges do not apply. However, the main differences are:

  • the beneficiary must become fully entitled to the assets in the trust by the age of 25
  • when the beneficiary is aged between 18 and 25, Inheritance Tax exit charges may apply

Trusts for disabled beneficiaries

There’s no 10-yearly charge or exit charge on this type of trust as long as the asset stays in the trust and remains the ‘interest’ of the beneficiary.

You also do not have to pay Inheritance Tax on the transfer of assets into a trust for a disabled person as long as the person making the transfer survives for 7 years after making the transfer.

Paying Inheritance Tax

You pay Inheritance Tax using form IHT100.

If you’re valuing the estate of someone who’s died, you may have to value other assets apart from trusts to see if Inheritance Tax is due.

More help and information

There’s more detailed guidance on trusts and Inheritance Tax.

Contact HMRC or get professional tax advice if you need help.

8. Beneficiaries - paying and reclaiming tax on trusts

If you’re a trust beneficiary there are different rules depending on the type of trust. You might have to pay tax through Self Assessment or you might be entitled to a tax refund.

If you do not usually send a tax return and need to, you must register for Self Assessment by 5 October following the tax year you had the income.

Read the information on the different types of trust to understand the main differences between them. If you’re not sure what type of trust you have, ask the trustees.

If you’re the beneficiary of a bare trust you are responsible for declaring and paying tax on its income. Do this on a Self Assessment tax return.

If you do not usually send a tax return and need to, you must register for Self Assessment by 5 October following the tax year you had the income.

Interest in possession trusts

If you’re the beneficiary of this type of trust, you’re entitled to its income (after expenses) as it arises.

If you ask for a statement, the trustees must tell you:

  • the different sources of income
  • how much income you’ve been given
  • how much tax has been paid on the income

You’ll usually get income sent through the trustees, but they might pass it to you directly without paying tax first. If this happens you need to include it on your Self Assessment tax return.

If you do not usually send a tax return you must register for Self Assessment by 5 October the year after you were given the income.

Example

You were given income from the trust in August 2023. You need to register for Self Assessment before 5 October 2024.

If you’re a basic rate taxpayer

You will not owe any extra tax. You’ll still need to complete a Self Assessment tax return to show the income you receive from an interest in possession trust but you will get a credit for the tax paid by the trustees. This means the income is not taxed twice.

If you’re a higher rate taxpayer

You’ll have to pay extra tax on the difference between what tax the trustees have paid and what you, as a higher rate taxpayer, are liable for. This will be calculated when you do your Self Assessment.

How to reclaim tax

You can reclaim tax paid on:

The allowance amount will be reduced if it’s already been used against some income. The allowance you have left is called the ‘available allowance’.

If the amount of income you receive is less than or equal to the available allowance, you can reclaim all of the tax paid.

If the amount of income you receive is more than the available allowance, you can only claim the tax paid on the available allowance.

If you’re a Self Assessment taxpayer the repayment will be calculated as part of your return.

If you’re not a Self Assessment taxpayer you can reclaim the tax using form R40.

You need to make a separate claim for each tax year.

Accumulation or discretionary trusts

With these trusts all income received by beneficiaries is treated as though it has already been taxed at 45%. If you’re an additional rate taxpayer there will be no more tax to pay.

You may be able to claim tax back on trust income you’ve received if any of the following apply:

  • you’re a non-taxpayer
  • you pay tax at the basic rate of 20%
  • you pay tax at the higher rate of 40%

You can reclaim the tax paid using form R40. If you complete a tax return, you can claim through Self Assessment.

Settlor-interested discretionary trusts

If a settlor-interested trust is a discretionary trust, payments made to the settlor’s spouse or civil partner are treated as though they’ve already been taxed at 45%. There’s no more tax to pay. However, unlike payments made from other types of trusts, the tax credit cannot be claimed back.

Non-resident trusts

This is a trust where the trustees are not resident in the UK for tax purposes. The tax rules for this type of trust are very complicated - there’s detailed guidance on non-resident trusts.

If a pension scheme pays into a trust

When a pension scheme pays a taxable lump sum into a trust after the pension holder dies, the payment is taxed at 45%.

If you’re a beneficiary and receive a payment funded by this lump sum, you’ll also be taxed.

You can claim back tax paid on the original lump sum - do this on your Self Assessment tax return if you complete one, or using form R40.

The trust will tell you the amount you need to report - this will normally be more than the amount you actually receive.

9. Trustees - tax responsibilities

As the trustee, you’re responsible for reporting and paying tax on behalf of the trust.

If there are 2 or more trustees, nominate one as the ‘principal acting trustee’ to manage its tax. The other trustees are still accountable, and can be charged tax and interest if the trust does not pay.

Registering a trust

Once a trust becomes liable for tax, you must register the trust with HM Revenue and Customs.

Sending tax returns

You must report the trust’s income and gains in a trust and estate Self Assessment tax return after the end of each tax year. You can either:

You can also get help, for example from HMRC or by getting an accountant to do your return for you.

After you’ve sent your return, HMRC will tell you how much you owe. You’ll need to pay your Self Assessment bill by the deadline.

You’ll need to collect and keep records (for example bank statements) to complete your tax return.

Telling beneficiaries about tax and income

You must give the beneficiary a statement with the amount of income and tax paid by the trust, if they ask. You can use form R185 (trust) to do this. There’s a different form if you need to provide a statement to a settlor who retains an interest.

If there’s more than one beneficiary, you must give each of them this information relative to the amount they receive.

Death benefit payments from a pension scheme

You must give the beneficiary extra information if both the following apply:

  • you make a payment funded by a taxable lump sum from a pension scheme
  • the pension holder has died

Use form R185 (LSDB) if you’re a trustee. There’s a different form if you’re a pension administrator.

You must tell the beneficiary within 30 days.

Other responsibilities

You may have to report other things to HMRC. You need to:

Your other responsibilities as a trustee depend on the type of trust and any instructions from the person who set up the trust in the trust deed.

10. When you must register a trust

Most trusts need to be registered. There are some cases where you do not need to register.

You never need to register a trust that was imposed by a court or created through legislation.

You can get advice from a solicitor or get advice from a tax advisor about when to register a trust.

If your trust is liable for UK taxes

You must usually register your trust with HM Revenue and Customs (HMRC) if it becomes liable for any of the following:

  • Capital Gains Tax
  • Income Tax
  • Inheritance Tax
  • Stamp Duty Reserve Tax
  • Stamp Duty Land Tax or Land and Buildings Transaction Tax (in Scotland)
  • Land Transaction Tax (in Wales)

You must also register a trust to claim tax relief.

Non-resident trusts

You must register a non-resident trust if it becomes liable for:

  • tax on UK income
  • tax on UK assets

If your trust is not liable for UK taxes

You must register your trust even if it’s not liable for UK taxes - unless any of the following apply.

You do not need to register your trust if it:

  • holds money or assets of a UK registered pension scheme - like an occupational pension scheme
  • holds life or retirement policies (as long as the policy only pays out on death, terminal or critical illness or permanent disablement, or to meet the healthcare costs of the person assured)
  • holds insurance policy benefits received after the person assured has died (as long as the benefits are paid out from the trust within 2 years of their death)
  • is a charitable trust that is registered as a charity in the UK or which is not required to register as a charity
  • is a ‘pilot’ trust set up before 6 October 2020 and holds no more than £100 - pilot trusts set up on or after 6 October 2020 need to register
  • is a co-ownership trust set up to hold shares of property or other assets which are jointly owned by 2 or more people for themselves as ‘tenants in common’
  • is a will trust created by a person’s will and comes into effect when they die (as long as they only hold the estate assets for up to 2 years after the person’s death)
  • is for bereaved children under 18, or adults aged 18 to 25, set up under the will (or intestacy) of a deceased parent or the Criminal Injuries Compensation Scheme
  • is a ‘financial’ or ‘commercial’ trust created in the course of professional services or business transactions for holding client money or other assets

Some financial products and arrangements with ‘Trust’ in their description (like the Child Trust Fund or Venture Capital Trusts) are not really trusts. Get advice from a solicitor or get advice from a tax advisor if you’re not sure.

How to register

How you register a trust depends on whether you’re:

There’s a different process if you need to register an estate of someone who’s died.