Overview

This guidance note discusses the duties of trustees in respect of preparing accounts and accounting to the beneficiaries, and why the preparation of trust accounts is essential in a well managed trust.

This guidance note deals with the position in England and Wales only. See Simon’s Taxes I5.8 for details of the provisions affecting Scotland and Northern Ireland.

Duty to prepare trust accounts

Trustees have a duty to account to the beneficiaries for their financial administration of the trust fund. However, there is no statutory duty to prepare accounts.

Consequently, trustees have much flexibility in how their duty is to be fulfilled. Where professional trustees are acting, they will be required by the regulations of their professional bodies to provide adequate accounts of their transactions, but even then there is no mandatory format for this information.

The Society of Trust and Estate Practitioners (STEP) has published STEP Accounting guidelines for trusts and estates, which cover best practice and sample presentations.

Who is entitled to see the accounts?

Who