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A trust is a legal way of arranging some of your assets for the benefit of others, without giving them full control.
There are three groups of people needed to set up a trust; the settlor (donor), the trustees, and the beneficiaries. These are commonly used terms within trust documents.
This is the person (or people) who set up the trust. They will be the current owners of the assets being put into the trust. The settlor chooses the trustees and decides who they’d like the beneficiaries to be.
These are the people responsible for managing the trust assets and dealing with the administration and tax affairs of the trust. Trustees can be individuals or a trust corporation.
These are the people who will get the money from the trust. You can name them individually or as a class of people, for example, ‘all of your children’.
There are many reasons why you might want to use a trust:
There are different types of trusts and it might not be clear which one is the best choice for you or how to set it up. Here are some of the most common types of trust:
All of our trusts are designed to work with our products. Learn more about these trusts in our guide.
Once you’ve placed the assets into a trust, you can’t usually change your mind and take them back, so it’s important to make sure that you’ve chosen the right trust for your needs. You should always speak to an adviser before setting up a trust.
Certain trusts need to be registered with HMRC’s Trust Registration Service (TRS). Trusts holding an Irish investment bond will also need to register with the Irish Central Register of Beneficial Ownership of Trusts (CRBOT). You can find out how to register here.
Income tax, inheritance tax and capital gains tax are treated differently across the various trusts. Your adviser will be able to tell you how tax could apply to the trust and the investment you’re thinking of setting up.
The value of your investment can go down as well as up and you may get back less than you invest. The way investments performed in the past is not a guide to how they’ll perform in the future. Tax rules depend on individual circumstances and may change. Speak to an adviser for more information on tax.
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