There are many trust available and each one is designed for specific purposes, their principal design is for the long-term protection of assets and estate preservation for future generations. We can introduce these trusts into your Will document if it is beneficial for you and your dependents.

Trusts are a way of looking after assets (money, investments, land or buildings) for people. People set up trusts and allow people to administer them for a variety of reason.

A trust is a legal arrangement where one or more 'trustees' are made legally responsible for holding assets. The assets - such as land, money, buildings, shares or even antiques - are placed in trust for the benefit of one or more 'beneficiaries'
The trustees are responsible for managing the trust and carrying out the wishes of the person who has put the assets into trust (the 'settlor'). The settlor's wishes for the trust are usually written in their will or set out in a legal document called 'the trust deed.'

Trusts may be set up for a number of reasons, for example:

• to control and protect family assets
• when someone is too young to handle their affairs
• when someone can't handle their affairs because they are incapacitated
• to pass on money or property while you are still alive
• to pass on money or assets when you die under the terms of your will - known as a 'will trust'
• under the rules of inheritance that apply when someone dies without leaving a valid will (England and Wales only)

There are several types of UK family trusts and each type of trust may be taxed differently.
There are other types of 'non-family' trusts. These are set up for many reasons. For example, to operate as a charity, or to provide a means for employers to create a pension scheme for their staff.

Heritage, charitable or business-related trusts

'Trust property' is a phrase often used for the assets held in a trust. It can include:

• money
• investments
• land or buildings
• other assets, such as paintings, furniture or jewellery - sometimes referred to as 'chattels'

The cash and investments held in a trust are also called the trust 'capital' or 'fund'. This capital or fund may produce income, such as interest on savings or dividends on shares. The land and buildings may produce rental income. Assets may also be sold producing gains for the trust. The way income is taxed depends on the type of income and the type of trust.

A settlor is a person who has put assets into the trust. This is known as 'settling' property. Assets are normally put into the trust when it's created, but they can also be added at a later date. The settlor decides how the assets in the trust and any income received from it should be used. This is usually set out in the trust deed.
In some trusts, the settlor can also benefit from the assets they’ve put in. These types of trust are known as 'settlor-interested' trusts and they have their own tax rules.

Trustees are the legal owners of the assets held in a trust. Their role is to:

• deal with trust assets in line with the trust deed
• manage the trust on a day-to-day basis and pay any tax due on the income or chargeable gains of the trust
• decide how to invest the trust's assets and/or how the assets in the trust are to be used - although this must always be in line with the trust deed

The trust can continue even though the trustees might change. However, there must be at least one trustee. Often there will be a minimum of two trustees. One trustee may be a professional familiar with trusts - while the other may be a family member or relative.

A beneficiary is anyone who benefits from the assets held in the trust. There can be one or more beneficiary, such as a whole family or a defined group of people. Each beneficiary may benefit from the trust in a different way.
For example, a beneficiary may benefit from:

• the income only - for example, they might get income from letting a house or flat held in a trust
• the capital only - for example, they might get shares held on trust when they reach a certain age
• both the income and capital of the trust - for example they might be entitled to the trust income and have a discretionary interest in trust capital

If you're a beneficiary you may have extra tax to pay or be entitled to claim some back depending on your overall income.

The treatment of trusts for tax purposes is the same throughout the United Kingdom. However, Scots law on trusts and the terms used in relation to trusts in Scotland are different from the laws of England and Wales and Northern Ireland.

Understanding trusts can be difficult so you may want to work with a professional. Remember though that the trustee is still legally responsible for the trust's tax affairs.

Types of trust and tax implications

Bare trusts

With a bare trust each beneficiary has an immediate right to both capital and income.

Interest in possession trusts

With interest in possession trusts, beneficiaries have a right to all trust income.

Discretionary or accumulation trusts

Discretionary trust trustees choose whether to pay out trust income, accumulation trust trustees re-invest income.

Mixed trusts

Mixed trusts combine different types of trusts.

Settlor-interested trusts

The 'settlor' who puts assets into a trust can continue to benefit from those assets.

Parental trusts for children

Special tax rules for trusts set up by parents for unmarried children below the age of 18.

Non-resident trusts

UK trusts may be set up or managed by people living abroad.

Trusts for vulnerable people

Special tax rules for trusts set up for disabled people or children who have lost a parent - calculating and claiming tax relief.

Heritage, charitable or business-related trusts

Link to tax guidance on sinking funds, employee share schemes, heritage and maintenance trusts and others.