Introduction to trusts: types of trust: blind trust
There are two main types of ‘blind’ trusts.
- An individual puts funds or assets into a trust on terms which allow the trustees to buy and sell trust assets as they see fit without informing the settlor. The purpose of such a trust is to allow a politician not to declare an interest in certain assets because they do not know at any time what assets are owned by the trust. The settlor may retain an interest or the trust may even be a bare trust in which the settlor remains absolutely entitled to the assets. In either case the trustees need give only sufficient details of income and gains to allow the settlor to complete a Self Assessment Tax Return. It is possible there are many bare blind trusts that HMRC would not be aware of because all income and gains are returned by the settlor on their personal Self Assessment Tax Return.
- A trust is created to fund a political party or a particular political campaign. Once created, it is possible for sympathisers to donate to the trust fund anonymously. The purpose of such a trust is to allow politicians to use the funds and claim they are not aware of the settlors/donors so cannot be influenced by them. The trustees should make returns of income and gains. The trust is likely to be discretionary in nature (see TSEM1565).