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HMRC internal manual

Self Assessment Manual

HM Revenue & Customs
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Returns: trust returns: bare trusts

A bare trust is one where the beneficial owner of the trust property is absolutely entitled to both the capital and income from that property. The trustees of bare trusts are not required to complete SA returns or to make payments on account.

However, bare trustees are entitled under Section 59 ICTA 1988 to make a return of trust income, but not capital gains and losses, and to account for the income tax due.

Exceptionally, the trustees will want to make a return, and in this event you should set up an SA trust record or re-activate a dormant record.

The trustees must notify you of their intention to make annual returns and notify the beneficiaries of this fact. The arrangement should not be changed in future years. Note: Where, however, it is logical for this arrangement to cease you should satisfy yourself that there is a genuine reason to do so and accept the request.

Where there is no likelihood of any tax being due from the trustees year on year, you should make the SA record dormant.