UK TRUST SET UP & TRUSTEE SERVICES


Families have been using trusts to preserve and manage their wealth for centuries. Unlike corporate vehicles, the lack of rigid formal requirements for the creation and operation of trusts, and the tremendous flexibility of trust instruments, make them uniquely useful for estate and succession planning.

Although many of the tax benefits that were associated with trusts have been eroded in recent years by anti-tax avoidance legislation, they still offer great advantages – particularly for individuals who:

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Are changing, or planning to change, their domicile, residence or citizenship;
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Have family members that are resident abroad;
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Are seeking asset protection;
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Are seeking to dispose of their estate on death freely and without recourse to a lengthy and expensive probate procedure.

The practical advantages of setting up a trust are gained from the distinction that is drawn between the formal or legal owner of property, the trustee, and those people that have the use or benefit of the property, the beneficiaries.

It is vital that the trustee remains independent and exercises proper control over the trust property. A trust may be deemed to be invalid if the settlor continues to exercise power over the trust assets by retaining benefit or control, or by giving directions to the trustees.

Those unfamiliar with the trust concept are often concerned by the idea of transferring ownership of their property to a trustee. This concern can be alleviated if the trust concept and the distinction between legal and beneficial ownership is properly understood and it is clear that the trust is governed by a reliable trust law that can be enforced in a reputable jurisdiction.

Sovereign has more than 30 years’ experience of setting up and managing various types of trust both in the UK and overseas. We are authorised and licensed to establish trusts and provide professional trustee services in the following jurisdictions:

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Onshore – Cyprus, Malta and the UK
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Midshore – Hong Kong, Mauritius and Singapore
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Offshore – Gibraltar, Guernsey and the Isle of Man

Importantly, non-UK property that is settled into a trust by a settlor who is not domiciled (or ‘deemed’ to be domiciled) in the UK, is excluded property for IHT purposes. Trusts benefitting from this status are usually referred to as ‘Excluded Property Trusts’ (EPTs) and effectively offer permanent shelter from UK IHT, even if the settlor subsequently acquires a UK domicile or becomes deemed UK domiciled (provided that certain conditions are met). Furthermore, any gains made by assets in this form of trust or made by any underlying offshore company held by the EPT, will generally not be subject to UK CGT.

Get in Touch

Please contact us if you have any questions or queries and your local representative will be in touch with you as soon as possible.