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Where Taxpayers and Advisers Meet

Bare Trust for child, xfer from Trustee to beneficiary's name

zxcv
Posts:6
Joined:Wed Jan 17, 2018 12:12 pm
Bare Trust for child, xfer from Trustee to beneficiary's name

Postby zxcv » Tue May 28, 2024 4:20 pm

Hi all,

About 20 years ago I set up a bare trust for my son. It is in the name of my wife (his mum) and the paperwork shows the owner as "Jane Smith A/D SS" where Jane Smith is the made up name for my wife and 'SS' are the initials for my son.

It's with a large financial company, whereby we invested around £50 every month for around 16 years, with the money being drip-fed into a general unit trust.


My son is now in his 20's and I would like to move the fund over to his name. My questions are :

1) What is the tax situation? Since there is no sale of any shares, there should be no CGT etc, right? My wife will not be transferring a 'gift' over, cos as I understand it, the funds always 'belonged' to my son due to this being a bare trust, and my wife was simply a trustee looking after it till the time he turned 18. Now that he's an adult, she's simply handing over what was his.

2) Do we just need to complete a stock transfer form? Or is there other paperwork/steps involved?

Many thanks in advance.

bd6759
Posts:4324
Joined:Sat Feb 01, 2014 3:26 pm

Re: Bare Trust for child, xfer from Trustee to beneficiary's name

Postby bd6759 » Wed May 29, 2024 7:49 pm

1. Correct. There is no CGT. You are changing legal owner, not the beneficial owner.

2. Yes.

Hope you declared the annual income as your own whilst he was a minor.

zxcv
Posts:6
Joined:Wed Jan 17, 2018 12:12 pm

Re: Bare Trust for child, xfer from Trustee to beneficiary's name

Postby zxcv » Thu May 30, 2024 9:21 am

Thanks bd6759.

I'll proceed with this and update once it's all sorted for the benefit of others who may in a similar situation.

AGoodman
Posts:1793
Joined:Fri May 16, 2014 3:47 pm

Re: Bare Trust for child, xfer from Trustee to beneficiary's name

Postby AGoodman » Thu Jun 06, 2024 9:57 am

The other paperwork is that the bare trust should be registered with the Trust Registration Service (operated by HMRC). You may not know this and, indeed, some platforms gave dodgy advice that bare trusts holding investments need not register (the exemption only applies to cash bank accounts).

If you are registered, you need to log on to the portal and "close" the trust.

If not, you have a decision whether to register and then immediately close it or let sleeping dogs lie.


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