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Where Taxpayers and Advisers Meet

Registration of bare trust

sigmund
Posts:87
Joined:Mon Nov 02, 2009 10:03 pm
Registration of bare trust

Postby sigmund » Thu Jun 09, 2022 10:56 am

I am rather confused about the registration of bare trusts by September and would be grateful for any advice.

I have a bare trust for my 13 year old grandson into which I pay £100 per month by direct debit which is used to purchase unit trusts for him with an investment platform. The trustees are myself and his aunt. [The account is designated on the lines - Mr Adam Smith and Ms Beth Jones (abcd) where abcd are my grandson's initials]. He does not have any other income and the amount of any of the unit distributions is far less than the personal tax allowance. Similarly any capital gain is less than the annual capital gains tax allowance. Does such a trust have to be registered and, if so, how?

I do not know whether it is relevant but the trust was set up just after his birth, and originally the trustees were myself and my wife. When my wife died his aunt became a trustee with myself.

pawncob
Posts:5090
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: Registration of bare trust

Postby pawncob » Thu Jun 09, 2022 11:45 am

https://www.taxationweb.co.uk/forum/viewtopic.php?f=8&t=58824&p=215270&hilit=trust+registration#p215270

https://www.taxationweb.co.uk/forum/viewtopic.php?f=8&t=58824&p=215252#p215252
With a pinch of salt take what I say, but don't exceed your RDA

sigmund
Posts:87
Joined:Mon Nov 02, 2009 10:03 pm

Re: Registration of bare trust

Postby sigmund » Thu Jun 09, 2022 1:43 pm

Thank you. I have looked at the forum but I still do not understand whether the bare trust to which I refer has to be registered. The forum seems to give conflicting advice.

pawncob
Posts:5090
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: Registration of bare trust

Postby pawncob » Thu Jun 09, 2022 4:13 pm

As it says, there is no specific exclusion for bare trusts, so you should register.
With a pinch of salt take what I say, but don't exceed your RDA

AGoodman
Posts:1738
Joined:Fri May 16, 2014 3:47 pm

Re: Registration of bare trust

Postby AGoodman » Thu Jun 09, 2022 7:10 pm

As pawncob says, all express trusts now have to register unless they are excluded. This does not fall into any of the limited exclusions.

Parky1
Posts:16
Joined:Sun Feb 09, 2020 5:52 pm

Re: Registration of bare trust

Postby Parky1 » Thu Jun 09, 2022 7:53 pm

I have a similar account and the provider advised me that if there is no trust deed I do not need to register.

pawncob
Posts:5090
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: Registration of bare trust

Postby pawncob » Thu Jun 09, 2022 8:07 pm

I know it's a pain in the butt,but you lose nothing by registering, and it's quite easy.
With a pinch of salt take what I say, but don't exceed your RDA

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: Registration of bare trust

Postby maths » Fri Jun 10, 2022 3:29 pm

There is no general exemption for bare trusts; see the following HMRC comments:"

"Though there is no general exclusion from registration for bare trusts, trusts created in the course of opening a bank account for a minor child or person lacking mental capacity are excluded from registration as express trusts (Sch3A(6A) of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017).

This exclusion only extends to trusts created when opening cash deposit accounts: investments (for example stocks and shares) held on trust for the benefit of a minor child will not qualify for this exclusion".

However, this specific exemption does not apply in your case ie registration of the trust is necessary.

AGoodman
Posts:1738
Joined:Fri May 16, 2014 3:47 pm

Re: Registration of bare trust

Postby AGoodman » Wed Jun 15, 2022 11:43 am

nb Parky1 - your provider appears to be taking a very restrictive interpretation of the rules. "Express trusts" need to register, which means a trust created deliberately. A trust created by deed would be an express trust but the phrase is much wider than just trusts created by deed.


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