Placing a Current Account into Trust

[marc02]

Background: A Trust would like to use a non-interest paying bank account to receive tax deferred income to distribute to beneficiaries. This bank account will be for the exclusive use by the Trust.

To facilitate this can a "personal" current account be:

1) Opened by the Trustee, whereby the Trustee passes a resolution to give ownership of the account to the said Trust.

Or

2) Opened by the Trustee, whereby the Trustee writes a bare trust to give ownership of the account to the said Trust.

Or

3) Should the Settlor open the current account and write it into the Trust.

[AGoodman]

A trustee can always declare that they hold the account and future additions on bare trust for a settlement.

However, it does carry problems now and in the future. If the account is not a trust account, the account holder will be down as the beneficial owner with the bank for CRS and other purposes. The most obvious result may be that HMRC will have him/her down as the recipient of the income, which could cause problems, particularly as they start to automate the self assessment process.

Ideally you should seek a trust account so that this is clear.

[marc02]

Thank you AGoodman.

Where there is no reportable income (no interest and other income within the 5% deferred tax) it may be 'simpler' to avoid the admin of a dedicated Trust account and set-up a 'personal' current account. Would a resolution by the Trustee suffice so far a documentation? (Plus if needed the evidence of the bank statements demonstrating exclusivity for the Trust).

[AGoodman]

Personally I would use a one/two line declaration of trust

[marc02]

Appreciated. Thank you.