Our Trusts Service

Clients decide to use trusts for a variety of reasons depending on their personal circumstances. We also advise trustees of existing trusts in relation to complying with their obligations and getting the most out of their trust.

There are different types of trusts. Our expert team will advise you on the options available to you, including, what sorts of trusts may suit your circumstances. We also advise on the tax implications of entering into a specific type of trust. Not all trusts are taxed in the same way.

Our wills, trusts, and probate lawyers regularly advise on and set up the following:

  • Trusts for families with children from different relationships;
  • Trusts to ensure assets pass through the bloodline relatives only;
  • Trusts in Wills for unmarried couples for tax planning purposes;
  • Discretionary trusts to protect assets for a variety of reasons;
  • Trusts to protect vulnerable or disabled beneficiaries;
  • Trusts for tax planning purposes;
  • Personal injury trusts;
  • Trusts to protect property;
  • Charitable trusts;
  • Employee Benefit Trust (EBT);
  • Pension trusts;

We also advise trustees of existing trusts on their obligations and responsibilities. We can act as professional trustees and we have our own trust corporation.

Contact Our Wills, Trusts, and Probate Team

Our Approach & Our Experience with Trusts

All of our team have done extra qualifications in trust administration and also the tax regime for trusts. We have extensive experience in setting up and managing live trusts. This means that we are aware of the practicalities of running, advising and drafting new trusts.

At Myerson, our team of Solicitors have acquired the prestigious STEP (Society of Trust and Estate Practitioners) qualification.

STEP is an international professional association for practitioners who specialise in advice on family succession and inheritance, trusts and complicated estates. The organisation promotes education and high professional standards amongst members who are recognised by other professional advisers as well as the public.

Our team are highly ranked in The Legal 500 for personal tax, trusts and probate and in Chambers under the high-net-worth category.

Bik-ki Wong, Head of our Private Client team, has been recognised as one of the top influential private wealth law lawyers in Manchester 2023 by Business Today, and as one of the best probate and wills lawyers for high-net-worth individuals in the UK in 2023 by Spear's.

Our expert Solicitors provide clear advice to clients who would benefit from the use of trusts so that they go away understanding why they are creating a trust and how it will work in practice.

We provide the legal requirements you will need for your trusts and we have excellent connections with other experts such as IFAs and tax advisers, thanks to our UK200 Group membership, with whom we can put you in touch.

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Why Work With Our Wills, Trusts, and Probate Team?

  • We have been ranked as a Top Tier law firm by the Legal 500 for the last seven years, and Myerson is recognised as a Top 200 UK law firm.
  • You will have access to Myerson's full Wills, Trusts, and Probate experts; we have a large team capable of meeting your deadlines.
  • When dealing with estates, we never forget that we are dealing with a grieving family, so our solicitors are tactile when handling a deceased person's estate.
  • Our Wills, Trusts and Probate lawyers understand that estate administration can be complex, particularly when disputes arise.
  • Our Wills, Trusts, and Probate solicitors appreciate that every person's circumstances are different, and our clients have different attitudes to tax saving and the distribution of their estates, so we take the time to find the best way to achieve our client’s aims.
  • Our holistic approach means we can spot potential tax-saving opportunities the client may need to know. We can also warn where the client's proposals may lead to unexpected tax liabilities.
  • You will receive city-quality trusts, wills, and probate advice at regional prices.
  • We provide a partner-led service to ensure you receive the best legal advice and commercially minded support.
  • Our personal service will prioritise your best interests as we push to fulfil your and your loved one's wishes. We understand the depth of emotion that matters relating to final wishes can hold, so we provide expert advice, support, and understanding.
  • Our full-service law firm operates from a one-site office, so our teams communicate effectively and efficiently, sharing their considerable expertise. We may consult with our family law and property law teams to maintain an efficient and complete service.
  • Our Wills, Trusts and Probate team works closely with our contested wills solicitors to ensure you get expert legal advice from specialist solicitors.
  • We use the latest technology to ensure that we are working as efficiently as possible, and that geographical distance is no bar to us from providing excellent client service.
  • With members of our Wills, Trusts, and Probate team speaking fluent Cantonese, we cater to the requirements of our clients to ensure effective communication when dealing with estates.
  • Look at the Myerson Promise for further benefits of working with us here.

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What is a Discretionary Trust and why direct funds to it?

A discretionary trust is a trust where you nominate a range of potential beneficiaries (usually spouses, children, and grandchildren). You will appoint trustees who will be in charge of managing the trusts. Who you appoint as trustees will depend on the circumstances and your reasons for using the trust.

The trustees have complete discretion to pay out income and/or capital from the trust to any of the beneficiaries listed at any time. No beneficiary has an automatic right to the funds. They cannot demand funds and not one of the beneficiaries actually owns any of the trust assets. As no one has an entitlement to the assets in the trust (unless the trustees decide that they do), the assets in the trust do not belong to any individual beneficiary and are not inside their estate at death. Similarly, they do not belong to any individual beneficiary if they should get into financial difficulties or get divorced (although assets in trust on divorce may be challenged by a matrimonial court).

Discretionary trusts are used for a variety of reasons including tax-efficiently passing wealth on to grandchildren and further descendants and protecting assets and vulnerable beneficiaries.

This sort of trust can be useful for protection from care fees if an individual leaves assets to a trust instead of the surviving spouse upon death. If the surviving spouse goes into care, the assets in the trust are not within the survivor’s estate and the local authority cannot recoup them towards care fees.

The trust can last for up to 125 years, allowing wealth to be passed down generations. If leaving assets to children directly will simply add to an already taxable estate, you may leave assets to a trust to pass them on to the grandchildren and further descendants.
Many people use trusts where they want a beneficiary to have the benefit of the funds but do not wish them to have control over them. For example, this may be due to the beneficiary being poor at managing money, having issues with addiction or being susceptible to outside influences. This sort of trust can also be used for minors or disabled individuals.

A discretionary trust offers flexibility. As the trustees have control over when funds are used or paid out, they can make the decisions based on the circumstances at the time.

What is the The Nil Rate Band Threshold?

Every individual has an inheritance tax (“IHT”) threshold of £325,000 before any inheritance tax is payable on their estate. There is also no tax to pay on gifts between spouses and it is possible to use the unused nil-rate band of the first spouse to die, against the second spouse’s estate when they die.

If an amount higher than the nil rate band is given to a discretionary trust, then there are inheritance tax implications.

When a trust holds assets to a value of more than £325,000 there is a charge to tax every ten years at a maximum rate of 6% on the assets in the trust which exceeds the inheritance tax threshold at that time. There is a proportionate charge on capital paid out of the trust between ten-year anniversaries.
If you set up a discretionary trust during your lifetime, rather than in your Will, then there will be an immediate charge to IHT at 20% on anything over the £325,000 threshold being transferred into the trust.

Assets that benefit from business property relief do not suffer IHT at any time.

Please note that the new residence nil rate band will not apply where the property is left to a discretionary trust. However, it should be possible to distribute the asset out of the trust to eligible beneficiaries within two years of death. This should therefore not deter people from leaving assets to a discretionary trust if it is a good option for their circumstances. You should ensure that your trustees will get the proper advice at the time so that the trust assets are managed in the most tax-efficient way.

What is Capital Gains Tax (“CGT”)?

Trusts pay CGT at a rate of 20% for the tax year 2021/2022. However, there is an additional surcharge for CGT on residential property of 8%. So, gains on the sale of residential property from a trust will be taxed at 28%. Trusts have an annual exemption equal to half that of an individual, so currently £6150, which can be used against the gain before any CGT is payable.

Entrepreneur’s relief may be available in certain circumstances.

Why do I need to be aware of Income Tax?

If the trust is going to receive income, then you need to be aware of the income tax implications. Discretionary trusts pay income tax at the basic rate on their income below £1,000 per annum. Above that, for the tax year 2021/2022 they pay tax at the rate of 45% on the majority of income and 38.1% on dividends. Trusts do not benefit from the £5000 tax-free allowance for savings income.

Beneficiaries who receive income from the trust, and who pay tax at lower rates (or not at all), can reclaim the difference. In addition, if a beneficiary has an entitlement to trust income (which the trustees can decide to create, or revoke), then the share of the trust income which they receive is treated as their own income and taxed accordingly. For this reason, it is usual to mandate the trust income to individual beneficiaries or to invest in non-income-producing assets.

This is a guide to be used alongside specific advice regarding your circumstances. Please do let us know if you want to discuss the above points in more detail.

What are trustees duties?

Trustee duties are recorded in legislation or confirmed in case law. Trustees are responsible for looking after the assets in the Trust, and Trustees must always act in the best interests of the Trust and act impartially between the Beneficiaries. Trustees have fiduciary duties, which include duties of confidentiality, a duty of no conflict and a duty not to profit from their position. Together with their fiduciary duties, the Trustees owe duties of skill and care. The standard of care depends on whether a Trustee is acting in a professional capacity or not.

As a minimum, the trustees should review the trust every year to check on the trust funds and the needs of the beneficiaries; complete any tax returns and submit them to HMRC and keep trust accounts. Any decisions made should be recorded by way of minutes and trustees’ resolutions. Formal deeds of appointment may have to be drawn up before payments are made to any beneficiary.

How is my money invested in trusts?

As well as complying with a statutory duty of care, Trustees must comply with the relevant provisions relating to investment in the Trustee Act 2000. The TA 2000 gives Trustees the power to make any kind of investment that they could have made if they were absolutely entitled to the assets in the Trust, but this general power does not extend to land. Trustees must review investments from time to time to consider the suitability and diversity of the investments. Trustees should take financial advice from a suitably qualified person. 

How is a trust taxed?

The tax treatment depends on the type of Trust. A bare trust is usually transparent for tax purposes and the beneficiary is taxed as if they own the assets. Charitable and offshore trusts have specific rules. Most other trusts will fall within the relevant property trust tax regime. The trust itself does not incur tax; instead, tax may fall on the Trustees, the person creating the Trust and/or the Beneficiaries. The taxes applicable to Trusts are:

  • Inheritance Tax (IHT) - potentially on the creation of the Trust, whenever assets are distributed out of the Trust and every 10 years.
  • Capital Gains Tax (CGT) – interacts with IHT and hold-over relief may apply.
  • Income Tax – applies differently to different categories of the Trust.
  • Stamp Duty (SDLT or SDRT)
  • Value Added Tax (VAT)

How long can a trust last?

Except for charitable trusts, the law has long prevented people from keeping assets in trusts indefinitely. Any trusts created now are subject to a maximum period of 125 years from the date of creation of Trust. A trust may be set to end when a Beneficiary reaches a certain age, or when a certain event occurs, as long as this within the 125 year period. Older trusts may have different fixed periods and typically it would have been 80 years.

Who can act as a trustee?

In principle, anyone can be a Trustee as long as they are over 18 and have mental capacity to act. A Trustee can be the person creating the Trust who wishes to retain control over the trust assets, a Beneficiary (but keep in mind a potential conflict of interest if there are other beneficiaries who are not trustees), a professional person (they will be the most impartial but will charge for acting), any other individual, a company and/or a limited liability partnership. It is important to choose Trustees carefully and trust that they have the relevant skills to carry out the duties. You should have a minimum of two trustees and a maximum of four. Trustees have to act unanimously so they need to be able to work together.


How can a trust help with inheritance tax planning?

If you survive 7 years from creating a Trust during your lifetime and do not retain any benefit from the trust, then the assets in the Trust will not form part of your estate for IHT purposes on your death. A Trust can be a preferable way to give assets away for IHT purposes without giving the assets outright to beneficiaries who may still be minors or vulnerable as it will allow you to retain control over how the trust assets are dealt with and applied if you also appoint yourself as a Trustee.

Trusts in Wills can also help to mitigate IHT. For example, if you own business assets or agricultural assets, then you could leave these assets into a trust on the first death to maximise the available reliefs and exemptions that will potentially result in an overall IHT saving.  The trust can also reduce the value of the estate passing to a surviving spouse which could allow your estate to qualify for other IHT reliefs such as the Residence Nil Rate Band.


Meet Our Wills, Trusts, and Probate Lawyers

Home-grown or recruited from national, regional or City firms. Our wills, trusts, and probate lawyers are experts in their fields and respected by their peers.

Bik-ki Wong

Bik-ki Wong

Bik-ki is a Partner and is Head of our Wills, Trusts, and Probate Team

Clara Staunton

Clara Staunton

Clara is a Partner in our Wills, Trusts, and Probate Team

Laura Willis

Laura Willis

Laura is a Senior Associate in our Wills, Trusts, and Probate Team

Simon Cieluch

Simon Cieluch

Simon is a Senior Associate in our Wills, Trusts, and Probate Team

Sarah Pull

Sarah Pull

Sarah is a Senior Associate in our Wills, Trusts, and Probate Team

Aalia Ijaz

Aalia Ijaz

Aalia is a Senior Associate in our Wills, Trusts, and Probate Team

Ben Murphy

Ben Murphy

Ben is a Solicitor in our Wills, Trusts, and Probate Team

Hannah Owens

Hannah Owens

Hannah is a Solicitor in our Wills, Trusts, and Probate Team

Dionne Elgott

Dionne Elgott

Dionne Elgott is a Trainee Solicitor in our Wills, Trusts & Probate Team

Carolyn Booth

Carolyn Booth

Carolyn is a Legal PA in our Wills, Trusts, and Probate Team

Contact Myerson Solicitors

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