Bare trusts ― IHT

Copyright © 2026 LexisNexis
Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance

Bare trusts ― IHT

Copyright © 2026 LexisNexis
Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance
imgtext

This guidance note discusses the IHT treatment of bare trusts. Bare trusts are sometimes used for inheritance tax planning although their use is limited. Bare trusts are not ‘settlements’ for inheritance tax purposes and so any transfer to a bare trust for an individual is not a chargeable lifetime transfer.

What is a bare trust?

The term 'bare trust' applies to an arrangement where the legal ownership of property is in a different name from that of the person beneficially entitled to it. The person entitled to it has absolute rights to both capital and income, but the legal owner will conduct the management of it. Some of the situations in which a bare trust might arise are described below.

Assets held for children

Minors do not have the legal capacity to enter into an enforceable contract or give a valid receipt. Property which, in equity, belongs to a child must be held in the name of a trustee. Whilst the child is under 18 (in England and Wales, 16 in Scotland), the trustee,

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™
TAKE A FREE TRIAL NOW
Powered by Tolley+™
  • 12 Nov 2025 09:40

Home/ Tolley Tax Guidance/ Trusts and Inheritance Tax / Advising on trusts — IHT

Popular Articles

Value Added Tax

Payments on account (POA)

Payments on account (POA)This guidance note provides and overview of the payments on account regime (POA). More in depth commentary can be found in De Voil Indirect Tax Service V5.110.What are payments on account?VAT registered businesses with an annual VAT liability of more than £2.3m are required

14 Jul 2020 12:52 | Produced by Tolley Read more Read more
Employment Tax

Non-business expenses

Non-business expensesIntroductionIn order for an expense to be tax deductible it must be incurred because of an employee’s employment. Any non-business related expense is, therefore, not relievable except in some very particular circumstances.This guidance note deals with three separate issues. The

14 Jul 2020 12:16 | Produced by Tolley Read more Read more
Trusts and Inheritance Tax

Bare trusts ― income tax and CGT

Bare trusts ― income tax and CGTThis guidance note explains how trustees of bare trusts are treated for income tax and capital gains purposes. Although a bare trust is, in equity, a type of trust, for both income tax and capital gains tax purposes its existence is transparent. This means that no tax

14 Jul 2020 15:34 | Produced by Tolley Read more Read more