What is a trust in UK law?

What is a trust in UK law?

A trust is a way of managing assets (money, investments, land or buildings) for people. There are different types of trusts and they are taxed differently. Trusts involve: the ‘settlor’ – the person who puts assets into a trust. the ‘trustee’ – the person who manages the trust.

What does trust mean in law?

Generally, a trust is a right in property (real or personal) which is held in a fiduciary relationship by one party for the benefit of another. The trustee is the one who holds title to the trust property, and the beneficiary is the person who receives the benefits of the trust.

Is a trust a legal person UK?

A trust is a legal relationship created (in lifetime, or on death) by a settlor when assets are placed under the control of a trustee for the benefit of a beneficiary, or for a specified purpose.

What are the cons of a trust?

Drawbacks of a Living Trust

• Paperwork. Setting up a living trust isn’t difficult or expensive, but it requires some paperwork.
• Record Keeping. After a revocable living trust is created, little day-to-day record keeping is required.
• Transfer Taxes.
• Difficulty Refinancing Trust Property.
• No Cutoff of Creditors’ Claims.

How much does a trust cost UK?

How much does it cost to put your house in trust? The amount a trust will cost will vary depending on the complexity of your affairs. Generally, a Property Trust Will costs between £350 and £500 plus VAT. It will cost more for couples registering together than it does for individuals.

What does putting a house in trust mean UK?

If you put things into a trust, provided certain conditions are met, they no longer belong to you. This means that when you die their value normally won’t be counted when your Inheritance Tax bill is worked out. Instead, the cash, investments or property belong to the trust.

How is a trust created in English law?

English trust law. Trusts are usually created by a settlor, who gives assets to one or more trustees who undertake to use the assets for the benefit of beneficiaries. Like in contract law no formality is required to make a trust, except where statute demands it (e.g. transfers of land, shares, for wills).

Is there a law of freedom of trust in England?

Some were codified in the Trustee Act 2000but others are construed by the courts. In many instances, English law follows a laissez-fairephilosophy of “freedom of trust”. In general, it will be left to the choice of the settlor to follow the law or to draft alternative rules.

Are trusts regulated by the law?

In contrast, in specific trusts, particularly pensions within the Pensions Act 1995, charitiesunder the Charities Act 2011, and investment trusts regulated by the Financial Services and Markets Act 2000, many rules regarding trusts’ administration, and the duties of trustees are made mandatory by statute.

What is the modern approach to trust law?

The modern approach in trust law is consistent with the UK company law duty of directors to pay regard to all stakeholders, not merely shareholders, in a company’s management. Trustees must simply invest according to general principles of the duty of care, and diversification.