Bare Trust - Multiple beneficiaries?

olbas_oil

wmb194 said:

olbas_oil said:

Bare trusts have to be registered with the Trust Registration Service (bit of a pain...but much easier than it used to be), and the AJ Bell account requires the TRS number.

But note that ordinary savings accounts are an exception to this.

What is the ordinary savings account an exception to?

• to having to register with the TRS?
• or to needing to quote the registration reference?

If the bare trust is an 'express trust' (and the OP seems to be contemplating this as a deliberate act) it needs to register.  The trust funds may then be invested in a savings account (though only a few providers will accept trust accounts) without supplying evidence that it has been registered, but registration is compulsory.

wmb194

olbas_oil said:

wmb194 said:

olbas_oil said:

Bare trusts have to be registered with the Trust Registration Service (bit of a pain...but much easier than it used to be), and the AJ Bell account requires the TRS number.

But note that ordinary savings accounts are an exception to this.

What is the ordinary savings account an exception to?

• to having to register with the TRS?
• or to needing to quote the registration reference?

If the bare trust is an 'express trust' (and the OP seems to be contemplating this as a deliberate act) it needs to register.  The trust funds may then be invested in a savings account (though only a few providers will accept trust accounts) without supplying evidence that it has been registered, but registration is compulsory.

If you're only dealing with savings accounts, you don't need to register. It makes sense as otherwise the country would be lousy with lawbreakers who opened accounts years and years ago and have no idea that this law was introduced. I'm only aware of it because I frequent this forum.

TRSM23160 - Types of trust that need to be registered: contents: excluded express trusts: contents: bank accounts for minors

https://www.gov.uk/hmrc-internal-manuals/trust-registration-service-manual/trsm23160

olbas_oil

wmb194 said:

If you're only dealing with savings accounts, you don't need to register. It makes sense as otherwise the country would be lousy with lawbreakers who opened accounts years and years ago and have no idea that this law was introduced. I'm only aware of it because I frequent this forum.

TRSM23160 - Types of trust that need to be registered: contents: excluded express trusts: contents: bank accounts for minors

https://www.gov.uk/hmrc-internal-manuals/trust-registration-service-manual/trsm23160

You're right. If the grandparent's funds are going into a savings account, there is no need to register with the TRS. 

xylophone

You're right. If the grandparent's funds are going into a savings account, there is no need to register with the TRS. 

There is an indication in the OP's first post that the settlors envisage something rather more sophisticated than a simple child's account held in bare trust.

If the assets are used for the benefit of the beneficiaries before they are 18 (e.g. dividend income from shares), 

olbas_oil

Ok OP so here's the plan...

1. Ask grandparent to logon to government gateway and register 2 trusts with TRS. They are main trustee and you are second.
2. Go to AJ Bell and open 2 children's bare trust accounts. You need the reference number from TRS. Again grandparent is main trustee.
3. Grandparent pays into accounts. Invest into whatever.
   You have now established that the source of funding was grandparent
4. After a month or two, swap main and second trustee, so you take over the running of the accounts.
5. There's no need to do any form of tax return, unless the income exceeds personal allowance + (savings/dividend). If the assets receive any taxed income, you could do a reclaim on behalf of the child.
6. Beware of CGT, which would require a tax return.
7. Over time, you may want to transfer up to £9kpa into a JISA. Or keep within bare trust for access before 18.

So no legal fees setting up trusts, and very little admin. You should keep the TRS up to date with any changes. 
AJ Bell charge a monthly fee for share custody.

Malthusian

After a month or two, swap main and second trustee, so you take over the running of the accounts.

This part is superfluous faff. The grandparent doesn't have to be a trustee if they don't want the bother. Equally, if they do want to be a trustee but want the OP to be "lead trustee" on the TRS they can do that from the off.
The paper trail showing that the money came from the grandparent (the cheque with their name on or a bank statement showing the money leaving their account) is enough to prove it came from them and isn't subject to the "£100 rule".

There's no need to do any form of tax return, unless the income exceeds personal allowance + (savings/dividend). I

Not quite correct. A tax return would be required if the child's taxable income from the investments exceeds £10,000, even if no tax was payable. (But the child would need to be pretty loaded to have investment income over £10,000pa.)

TheGreenFrog

If new money is being contributed into a nominee account at a broker (e.g. a bare trust account), you would need to check that the broker will accept funds from someone who is not an account holder.  If not funder will need to be an account holder (i.e. a bare trustee).

LHW99

Ask grandparent to logon to government gateway and register 2 trusts with TRS. .....

It needs a specific logon for registering a trust:

"Before you can register a trust as a trustee, you need to have an Organisation Government Gateway user ID and password.

This is different to an Individual Government Gateway user ID and password. You cannot use an Individual Government Gateway user ID and password to register a trust.

You’ll need a different Organisation Government Gateway user ID for each trust you are responsible for, you can create one when you register. Select ‘Organisation’ on the screen that is displayed after you have created your password."

https://www.gov.uk/guidance/register-a-trust-as-a-trustee

Also carefully note that you need to choose the "Organisation" option on the relevant screen, otherwise you will be told you can't register a (bare) trust when you get further on in the process (done that, been there )

Stodge71

I have a related question.
My parents set up a bare trust for my two children as joint beneficiaries. My parents are Trustees. The Trust was set up in DIY fashion by my father and has not been registered. The Power of Maintenance clause includes the following phrase:
"so long as the Beneficiaries are under the age of 18 years the Trustees may pay or otherwise apply for or towards the maintenance, education or benefit of the Beneficiaries the whole or such part or parts in equal amounts or otherwise to either of the Beneficiaries of the income and or capital of the Trust Fund as the Trustees in their absolute discretion think fit"
Our eldest daughter turns 18 next year. Our youngest daughter reaches that milestone 18 months later.
Our youngest daughter has physical and mental disabilities, does not have mental capacity to make financial decisions (we will apply for deputyship soon), and we are now aware that she will not live independently as an adult (she will stay with us) so will not have the same 'life-set-up' requirements of our eldest daughter (car, house, etc). Receiving assets from the trust will also affect her access to state benefits and support that she needs.
Given the above clause, can our eldest daughter receive 100% of the assets of the trust at turning 18? 
Alternatively, can the assets (or a large proportion of them) be taken out of the trust by the Trustees and given to our eldest daughter for her to put into an alternative investment - (it's too much to just spend for her benefit now, but will be over time!) 

I'm new to the forum so I hope this is the right way to go about asking this question?!

xylophone

My parents set up a bare trust for my two children as joint beneficiaries. My parents are Trustees. The Trust was set up in DIY fashion by my father and has not been registered.

"so long as the Beneficiaries are under the age of 18 years the Trustees may pay or otherwise apply for or towards the maintenance, education or benefit of the Beneficiaries the whole or such part or parts in equal amounts or otherwise to either of the Beneficiaries of the income and or capital of the Trust Fund as the Trustees in their absolute discretion think fit"

Are you sure that this is a bare trust?

Should it be registered?

https://www.theprivateoffice.com/specialist-services/bare-trusts

https://www.gov.uk/trusts-taxes/registering-a-trust

Do you need professional advice from a solicitor expert in trusts?