3. Parental trusts for children
These are trusts set up by parents for children under 18 who have never been married or in a civil partnership. They’re not a type of trust in their own right but will be either:
- a bare trust
- an interest in possession trust
- an accumulation trust
- a discretionary trust
Read the information on types of trust to find out more.
Income Tax on income from the trust is paid by the trustees, but the ‘settlor’ is responsible for it. This means:
The trustees pay Income Tax on the trust income by filling out a Trust and Estate Tax Return.
They give the settlor a statement of all the income and the rates of tax charged on it.
The settlor tells HM Revenue and Customs (HMRC) about the tax the trustees have paid on their behalf when filling out their Self Assessment tax return.