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Where Taxpayers and Advisers Meet

Adding a trustee to a bare trust

sigmund
Posts:82
Joined:Mon Nov 02, 2009 10:03 pm
Adding a trustee to a bare trust

Postby sigmund » Fri Nov 27, 2020 12:51 pm

Please could someone help me with the following problem. My wife and I were trustees for a bare trust for our grandson (now aged 12). My wife has died leaving me as the sole trustee. How can I add another trustee for the trust (probably his aunt) as I am concerned in case I should die before he is 18? Is it a fairly simple procedure?

maths
Posts:8088
Joined:Wed Aug 06, 2008 3:25 pm

Re: Adding a trustee to a bare trust

Postby maths » Fri Nov 27, 2020 2:02 pm

1, Check the terms of the trust to see what they provide in this regard. Often the person who provided the trust property is entitled under the trust during his/her lifetime to appoint new trustees.

Failing this:

2.There is a statutory power for the surviving trustees to appoint new trustees in writing {Trustee Act 1925 section 36).

sigmund
Posts:82
Joined:Mon Nov 02, 2009 10:03 pm

Re: Adding a trustee to a bare trust

Postby sigmund » Fri Nov 27, 2020 5:41 pm

Thank you for your reply. It is a very simple trust - just buying unit trusts/oeics for him for a fixed sum of money each month (which we have been doing since his birth). There is no property involved. Would that make a difference and how would I register the addition of another trustee?

maths
Posts:8088
Joined:Wed Aug 06, 2008 3:25 pm

Re: Adding a trustee to a bare trust

Postby maths » Sat Nov 28, 2020 2:07 pm

There is no need to register a bare trust with HMRC.

I was using the term "property" to mean all forms of assets be they OEICs, land etc.

AGoodman
Posts:1131
Joined:Fri May 16, 2014 3:47 pm

Re: Adding a trustee to a bare trust

Postby AGoodman » Wed Dec 02, 2020 10:39 am

n.b. unfortunately you will have to register the bare trust with HMRC by 10 March 2021 irrespective of whether the trustee changes.

This is to ensure you are not an international money launderer.

HMRC guidance has not yet been updated on the change which came into force in October. I suspect they will produce some guidance in February 2021.

bd6759
Posts:3451
Joined:Sat Feb 01, 2014 3:26 pm

Re: Adding a trustee to a bare trust

Postby bd6759 » Wed Dec 02, 2020 11:28 pm

n.b. unfortunately you will have to register the bare trust with HMRC by 10 March 2021 irrespective of whether the trustee changes.

This is to ensure you are not an international money launderer.

HMRC guidance has not yet been updated on the change which came into force in October. I suspect they will produce some guidance in February 2021.
Hate to doubt you, but I think the latest directive adds express trusts to the MLR regs, not bare trusts.

maths
Posts:8088
Joined:Wed Aug 06, 2008 3:25 pm

Re: Adding a trustee to a bare trust

Postby maths » Thu Dec 03, 2020 12:02 pm

I think AG is correct.

There is I believe a lack of clarity as to whether so-called bare trust are caught under the 5 MLD although it does seem that the poster's bare trust will require registration as trustees and beneficiaries are not the same; fact that beneficiaries are minors seems to not exclude registration.

Parky1
Posts:5
Joined:Sun Feb 09, 2020 5:52 pm

Re: Adding a trustee to a bare trust

Postby Parky1 » Thu Dec 03, 2020 3:16 pm

The Government guidance on trust registration, updated October 2020 says that you do not need to register a bare trust.
https://www.gov.uk/guidance/register-a-trust-as-a-trustee

AGoodman
Posts:1131
Joined:Fri May 16, 2014 3:47 pm

Re: Adding a trustee to a bare trust

Postby AGoodman » Thu Dec 03, 2020 4:11 pm

Well this is new. There's no corresponding exclusion in the legislation but it's definitely very welcome.

Maybe somebody realised just how many bare trusts would come out of the woodwork and have to register.

maths
Posts:8088
Joined:Wed Aug 06, 2008 3:25 pm

Re: Adding a trustee to a bare trust

Postby maths » Thu Dec 03, 2020 4:40 pm

I don't believe the HMRC web site has been updated and makes only general comments.

It seems clear from SI 2020/991 that bare trusts are not in general (subject to one or two exceptions) exempted from registration. In particular the poster's bare trust will need registration albeit not immediately.


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