SDLTM31710 - Application - Trusts and powers: Bare trusts
A bare trust in England, Wales and Northern Ireland or simple trust in Scotland is one in which each beneficiary is absolutely entitled as against the trustees to the property comprised in the trust.
The phrase absolutely entitled is explained in detail in the Capital Gains Manual at CG34320-34352 and broadly means that
- the beneficiary may acquire or receive the trust property either immediately or by giving the requisite notice to the trustees in accordance with the terms of the trust
- the trustees have no power over or right to deal with the trust property without the permission of the beneficiary who enjoys absolute entitlement
- the trustees are required to meet certain out goings or expenses of the trust
- and refuse to make trust property available to the beneficiary until such out goings or expenses have been met
the determination of whether the beneficiary is absolutely entitled to the trust property as against the trustees is not affected.
Two or more people may be absolutely entitled as against the trustees to trust property provided that each of them has the rights to the trust property described above.
Where a person acquires a chargeable interest as bare trustee, Stamp Duty Land Tax (SDLT) applies as if the interest was vested in, and the acts of the trustee in relation to it, were the acts of the person or persons for whom he is trustee.
An example can be found at SDLTM31710a.