A bare trust in the UK is a simple arrangement where a trustee holds assets (like cash or shares) on behalf of a beneficiary who has an immediate, absolute, and irrevocable right to both the capital and income at age 18 (16 in Scotland). The trustee has no discretion, acting only on instructions from the beneficiary.
What Types of Trusts we Accept
There are several different types of trusts, each designed for different needs and situations. Each type sets out different rules about who benefits, when assets are shared, and how much control trustees have. Because not all trusts are treated the same by every organisation, it’s important to understand which ones are accepted.
Types of Trusts Accepted by us
Bare Trust
Discretionary Trusts
Discretionary trusts are sometimes set up to put assets aside for: a future need, like a grandchild who may need more financial help than other beneficiaries at some point in their life. beneficiaries who are not capable or responsible enough to deal with money themselves.
Children's Trusts
A children’s trust in the UK is a legal arrangement where trustees manage assets (money, property, or investments) on behalf of beneficiaries under 18. It protects assets until children are older, commonly structured as bare trusts, interest in possession, or discretionary trusts to provide for education or inheritance
Personal Injury Trusts
A legal arrangement that holds compensation money from an accident or negligence claim, separating it from your personal assets to prevent it from affecting entitlement to means-tested state benefits or care funding.
The Trust is managed by trustees and the funds are protected and used for long-term care, living expenses or distributed to vulnerable individuals (the beneficiaries) at their benefit.
Vulnerable Person Trusts
Is a legal arrangement for individuals within the UK to manages assets of individuals that do not have the capacity to do so for themselves. I provides financial security and must be an induvial under the age of 18 or a disabled person – defined by specific tax/social security rules.
Will Trusts
Legal arrangement created within a person’s Will, and only takes effect upon that person’s death. It places assets (money, property, investments) under the control of a trustee.
Can be Life Interest Trust (also known as interest in possession trust – see below), bare trust or discretionary trust.
Interest In Possession Trusts
There are life-tenants and remainder beneficiaries within a IP (interest in possession trust).
A Life Tenant will automatically receive the income generated or occupy the property rent-free. But they CANNOT access the capital which is managed by trustees.
Remaining Beneficiaries will receive the capital assets after the life tenant dies.
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