Bank account for Trust

danco

I am sole trustee of a discretionary trust that at present has a trust bank account. Due to changes in their conditions it has become more difficult to use, and since the bank no longer offers these accounts I want to consider the possibility of changing the account.

I have a few questions.

1. From the point of view of the Trust, is there any reason why I should not have a personal account that I use only for the Trust, together with a document stating that this account is used only for this. The bank might not like it, but they would probably never know. The only transactions on the account would be two or three payments in (cashing in investments) and a dozen or so payments out (to beneficiaries).

2. There could be problems if I died, as accounts are usually frozen. There is a person formally appointed to become a trustee on my death so this issue could perhaps be solved by making the account joint with this person.

3. My personal estate is large enough that there will be IHT to pay. I intend to ask my accountant whether there is a form of wording that would be expected to make HMRC accept that this account is not part of my estate, and I feel there is no point asking about this issue on the forum. Alternatively, the amount of money in the account is small enough in relation to my total estate that it might be simplest just to let IHT be paid on the funds in the account.

Changing to Metro Bank Trust account is not an option. Apart from my being mean and not wanting to pay their fees, they require all beneficiaries to be based in the UK, which does not apply to this trust. I think the account I have was set up so long ago that this was not required at the time.

xylophone

this account is not part of my estate,

If this account is registered as a Trust account  with you as Trustee, then it is not part of your personal estate.

As I recollect, when a relative was one of the Trustees of a will trust, the cheques had "(testator's name) Will Trust"  printed on them  and the mandate with the bank (Barclays) was  any two out of three Trustees to sign  - in this case, one of the Trustees was a solicitor.

if your bank is willing to maintain the account (albeit with more onerous T&Cs) I would have thought that the easiest way to proceed (with the bank's agreement) would be to appoint an additional Trustee (preferably two additional Trustees) and add him/her/them as signatories with a two to sign mandate? 

Is the Trust registered with HMRC?

danco

Yes, the Trust is registered with HMRC.

I suppose I am mostly thinking aloud, trying to clarify my mind. The easiest way is probably to continue as things are unless the bank actively decides to close the account because they no longer provide these. At present it is just a matter of them no longer allowing me to access the account through a mobile app, which for various reasons is very inconvenient.

I don't think there is any need to appoint an additional Trustee at present, the account is very clearly a Trustee account. Its name is (my name) Trustee of (settlement name) and the only funds inner from sale of Trust investment and the only funds out are to beneficiaries.

The alternative, which I was thinking about, would be to have a bank account that was not officially a Trustee account (since these no longer exist) but to make sure it was organised in such a way that HMRC understood that it was not part of my personal estate.

xylophone

The alternative, which I was thinking about, would be to have a bank account that was not officially a Trustee account (since these no longer exist) but to make sure it was organised in such a way that HMRC understood that it was not part of my personal estate.

Trustee accounts do still exist.

https://trustsdiscussionforum.co.uk/t/uk-banks-who-will-open-trust-accounts/20288

danco

Cater Allen might work if needed, but they don't even give a vague idea of their charges. Metro Bank wouldn't work as some beneficiaries are not UK based. And I believe there are others that have trustee accounts but probably also require UK beneficiaries only.

At present the best thing seems to be to leave things as they are until my bank actually closes the trustee account (at the moment they are not accepting new accounts and have recently removed the option to use their app, but fortunately still allow me to use a web browser to access the account). But still there is some advantage in being prepared.

Whatever I use I need to be able to have an account that can easily make payments to an international money transfer service. Unfortunately the service I used in the past has recently decided that it will not accept payments of less than £1000 from a bank account, so I can no longer use it.