Search the ETC Tax Website

Request a callback

Callback Request

Please provide as much detail as possible in regards to the reason for your enquiry so our tax advisers can prepare and tailor their response to reflect your needs. We will endeavour to call you back to discuss your enquiry and you will not be charged for this time.

  • This field is for validation purposes and should be left unchanged.
  • Sign-up to our newsletter

    Newsletter Main Form

  • UK Trusts

    A trust is simply an arrangement where assets are held by one or more individuals or a trust company for the benefit of others. Trusts can be established during your lifetime or on your death if included in your will. While they are no longer primarily instruments for tax planning, they have a wide range of potential uses for the management and control of family assets.

    Expertise

    ETC Tax has extensive experience advising on the creation, management and winding up of UK trusts. We can provide advice to trustees and beneficiaries alike. We can advise on the most appropriate trust structure for your personal circumstances or review your existing structure to make sure that it is still fit for purpose.

    Tax position

    Trusts have distinct tax issues and can be complex and so to ensure they are set up and managed correctly, professional advice is essential. Speak to our tax experts today.

    Compliance requirements

    Trustees may be required to file self-assessment tax returns in respect of the income and capital gains received. ETC Tax can assist the Trustees with all of the UK tax filing obligations (including IHT reporting, if required).

    Why would you set up a trust?

    While you may think trusts are most commonly used for tax planning, you might in fact set up a trust for many other reasons. For example

    • You wish to make a gift of money but continue to exercise some discretion over how that money, or asset is used and invested;
    • If, due to illness or disability you are unable to look after your own assets;
    • To ensure that any assets that you leave to your children are protected should your spouse remarry after your death. 

    In short, trusts are not primarily an instrument of tax planning but instead flexible vehicles for the management and control of assets. 

    The main distinctions are bare trusts, interest in possession trusts and discretionary trusts.

    • Bare trusts – a bare trust is a simple agreement whereby one individual holds and asset as nominee for the other. In these cases, the income and capital belong to the beneficiary absolutely.
    • Interest in possession (IIP) trust – an IIP trust is one where the beneficiaries have an entitlement to the income of the assets held, or an entitlement to make use of them (e.g. to occupy a trust property rent free), but they are not entitled to the trust capital absolutely.
    • Discretionary trust – In a discretionary trust, beneficiaries have no fixed right to income or capital from the trust. Rather, the trustees have discretion over who benefits, when, how and to what extent.

    Careful consideration is required for inheritance tax and capital gains tax when establishing a trust. It’s a common misconception that assets in trust are exempt from inheritance tax. You’ll normally pay it at 20% when setting up a trust if it’s in excess of the inheritance tax nil-rate band. There will also be reporting required on each 10 year anniversary and also if the trusts are wound up or assets are distributed to the beneficiaries.

    The distinction between IIPs and discretionary trusts is important for income tax purposes and professional advice should be sought.

    Get in touch with us today

    Call or email us any time or, simply fill out the contact form below and a member of our team will be in touch.

    Contact Form


    Please provide as much detail as possible in regards to the reason for your enquiry so our tax advisers can prepare and tailor their response to reflect your needs. We will endeavour to - respond / call you back - to discuss your enquiry and you will not be charged for this time.

  • This field is for validation purposes and should be left unchanged.