Investing for a Trust

rekabuts1

Hi all,

One of my family has just received a large Personal Injury award (read as several millions) and it is in the form of a trust. I am one of the trustees and whilst fairly savvy with finances I'm totally new to trusts. The trust does not earn any interest and we are wanting to put the money to work for the beneficiary of course. Ideally a monthly income will be drawn from the investments and for this we are already looking to maxing out an NS&I Income Bond and what other investments are possible. I need some guidance however please as I'm not sure how this is done using trust funds. I've seen the form for a trust account with the NS&I which im part way through but is this the correct way? A far simpler alternative would be for me (a trustee) to invest as an individual on behalf of the trust which is a permitted function of a trustee. How does the latter however keep track of the funds belonging to the trust? I could do with some clear advice on what trust funds can be invested in (there are zero restrictions indicated in the deeds) and how because not everywhere does trust accounts I've noticed.

What have others done/invested in as a trust?

Albermarle

Considering the size of the funds involved, I would have thought some professional advice/help would be needed?

Linton

As above ^^^

Investing on behalf of a Trust is very different to investing your own money. If you lose money you could be held personally responsible. Paying for professional advice from an IFA should help protect you from any accusation of inappropriate management of trust funds and is a valid use of the Trust's money.

xylophone

large Personal Injury award (read as several millions)


I am one of the trustees and whilst fairly savvy with finances I'm totally  new to trusts. 

Take EXPERT advice on the management, investment strategy and taxation of the Trust.

Does it need to be registered with HMRC? While PI Trusts can be exempt, there are circumstances where registration may be required.

You could try below - tick "confirmed independent"  "trust and tax planning" "investments" when the menu comes up.

https://adviserbook.co.uk/

https://www.thepfs.org/news-insight/news/articles/personal-injury-trusts/3f989f69-2784-47b1-9972-546aada8ef66

poseidon1

rekabuts1 said:

Hi all,

One of my family has just received a large Personal Injury award (read as several millions) and it is in the form of a trust. I am one of the trustees and whilst fairly savvy with finances I'm totally new to trusts. The trust does not earn any interest and we are wanting to put the money to work for the beneficiary of course. Ideally a monthly income will be drawn from the investments and for this we are already looking to maxing out an NS&I Income Bond and what other investments are possible. I need some guidance however please as I'm not sure how this is done using trust funds. I've seen the form for a trust account with the NS&I which im part way through but is this the correct way? A far simpler alternative would be for me (a trustee) to invest as an individual on behalf of the trust which is a permitted function of a trustee. How does the latter however keep track of the funds belonging to the trust? I could do with some clear advice on what trust funds can be invested in (there are zero restrictions indicated in the deeds) and how because not everywhere does trust accounts I've noticed.

What have others done/invested in as a trust?

I will not pull any punches here, you are massively out of your depth and require professional assistance from a STEP qualified Chartered trust accountant who can help guide you to experienced wealth managers with long pedigrees in managing family trust funds. Firms such as Rathbones, Walker Crips, Arbuthnot Latham,  immediately spring to mind.

The accountant will also handle  annual trust accounts and trust tax compliance  which are complicated by the Vulnerable Persons relief provisions applicable here.

Please discard the notion that you can act as investment manager here. It would be an act of extreme trustee gross negligence leaving you personally liable for trust losses. There is a whole body of case law and statute appertaining to trustee investment powers and duties especially where millions are at stake.

Pending seeking professional advice from a trust accountant, suggest you have a very careful read of the guidance below  to get a proper idea of the very onerous responsibility bestowed on you. Frankly I am some what shocked none of the issues covered in the article appear to have been conveyed to you prior to entrusting the millions to your care.  Visiting this forum for 'tips and hints' was a sub optimal  move. Is your Co trustee similarly unaware?

https://www.trusteesupportservices.com/trustees-duties-and-responsibilities/