Whenever someone holds money on behalf of and for the benefit of someone else, that is a form of Trust. A Trustee is similar to a bank manager and the Trust is like a bank account, in which money and other assets, such as property, are held. A Trustee is the ‘legal’ owner of the Trust fund, but has a duty at all times to act in the best interests of the beneficiaries of the Trust, and not their own. This is called a ‘fiduciary’ role.

There are different types of Trust, each with its own purpose and set of rules surrounding it. The most common types of Trust are Bare Trusts, Life Interest Trusts, and Discretionary Trusts, which may be set up during someone’s lifetime, or through their Will which comes into effect on their death.

The primary reason individuals set up a Trust is to guard against certain factors, such as to:

• Protect the inheritance of young children until they are old enough to take responsibility for their own affairs;

• Ensure that a vulnerable beneficiary’s means-tested benefits are not taken away from them;

• Preserve assets which may otherwise become vulnerable to future care fees;

• Protect a beneficiary’s inheritance from risks such as bankruptcy, insolvency, divorce or dissolution of a marriage or civil partnership;

• Preserve an inheritance for children from a previous relationship, whilst still providing for a current partner.

Trust law can be a complex area on which our lawyers can advise and guide you, whether you are looking to set up, run or wind down a Trust. Our team members provide down to earth advice on both the positives and negatives of Trusts, and in particular can offer the following services:

• Providing legal advice to lay Trustees on an ad hoc basis;

• Preparing Trust documents to set up a Trust;

• Giving tax advice in connection with a Trust;

• Winding up lifetime Trusts;

• Registering a Trust on HMRC’s Trust Registration Service.

HMRC’s Trust Registration Service (TRS)
With some exceptions, most Trusts must be registered by the Trustees on HMRC’s online Trust Registration Service (TRS). This is to ensure that the Trust complies with anti-money laundering regulations and accounts for any tax which may be due from the Trust. HMRC may impose penalties if Trustees fail to register the Trust or do not keep the TRS up to date.

HMRC provides further guidance on the UK government website. Our team will also be happy to assist with Trust Registration matters.