UK trusts and nominees

What a trust is under UK law

A trust is a way of managing assets for others. It has three roles: the settlor, who puts the assets in; the trustees, who manage them; and the beneficiaries, who benefit. The trustees are the legal owners. They act under the trust deed, and there must always be at least one. Unlike a foundation in many civil law countries, a trust has no legal personality of its own.

The main types: in a bare trust the beneficiary owns everything once of age, 18 in England and Wales, 16 in Scotland. In an interest in possession trust one beneficiary receives the income, say the widow for life, while the capital later goes to the children. In a discretionary trust the trustees decide who gets what and when. If the settlor can benefit, it is a settlor-interested trust, with its own tax rules.

How inheritance tax treats trusts

Most trusts fall under the relevant property regime, which charges at three points. On the way in: anything above the £325,000 nil-rate band costs 20% at once if the trustees pay. If the settlor dies within seven years, it is recalculated at 40%. Every ten years: on the anniversary of the trust the trustees pay a charge of at most 6% on trust property above the nil-rate band. On the way out: when property leaves the trust, an exit charge of at most 6% applies too.

For business property and farmland in trust a separate £2.5 million limit for full relief has applied since 6 April 2026; details in business and agricultural property relief. And the Budget of 28 October 2026 closes a gap: debts taken on by trustees only reduce the value of trust property under clear rules. That applies to deaths and charging events from 28 October 2026; the legislation follows in the Finance Bill 2026-27.

The trust register: who must register with HMRC

Trustees of a UK express trust must register it with HMRC's Trust Registration Service. Foreign trusts must register too if they become liable to UK tax, for example through UK property or UK income, or if at least one trustee is UK resident and the trust enters into a business relationship in the UK. Missing details must be supplied within 90 days of registration. So for a Jersey or Liechtenstein trust with a house in London, the register is not a foreign word but a duty.

Offshore trusts after April 2025

For decades the offshore trust was the newcomer's instrument of choice. Put foreign assets into a trust before becoming deemed domiciled and they stayed out of UK inheritance tax for good, and income within the trust stayed largely untaxed for non-doms. Both are over.

Income and gains: the protection for foreign income and gains in settlor-interested trusts has ended for non-doms and deemed doms outside the four-year FIG regime. If the settlor, their spouse or civil partner can benefit, a UK-resident settlor is taxed on the foreign trust's income as their own. Gains of the foreign trustees can be attributed to the settlor or the beneficiaries. For trusts from 6 April 2025, whether a trust counts as foreign no longer depends on the settlor's domicile.

Inheritance tax: foreign trust property is now only exempt while the settlor is not a long-term UK resident at the time of each charge, that is not UK resident in 10 of the last 20 tax years. If they are, ten-year and exit charges apply to the foreign property too. If their status ends, that also triggers an exit charge. Property that was already excluded property in the trust before 30 October 2024 keeps partial protection, with charges capped at £5 million per ten years. How the status arises is explained in inheritance tax by residence.

The Budget of 28 October 2026 sends a friendlier signal to families with existing trusts who move to the UK. Concretely: if a trust becomes British only because a trustee moves to the UK, and leaves again in the same or the following year, the capital gains tax exit charge does not apply. That applies from 28 October 2026 and is in the Finance Bill 2026-27.

Nominee directors and nominee shareholders

The idea behind the nominee company was simple: a nominee appears in the register as director or shareholder, and the real owner stays invisible. In the UK today that idea no longer works.

Since 18 November 2025 identity verification at Companies House has been a legal requirement, with a twelve-month transition for existing companies. Every director must verify their identity. Add the register of persons with significant control (PSC): anyone holding more than 25% of the shares or votes or otherwise controlling the company is entered and must verify too. Whoever instructs the nominee director without sitting on the board exercises exactly the kind of control that makes them a PSC. They are also a shadow director, someone on whose instructions the directors are accustomed to act.

Anyone providing a director or nominee shareholder to others is also a trust or company service provider and needs anti-money-laundering supervision. A reputable provider will therefore check you thoroughly before signing anything for you. Bottom line: a company with a nominee does not make the owner invisible; it only makes the structure more expensive. If you need a UK company, you set it up openly today; our offer is UK company formation.

Sources: GOV.UK: Trusts and taxes; GOV.UK: Trusts and Inheritance Tax; GOV.UK: Check if you need to register a trust; GOV.UK: Register a trust; GOV.UK: Non-resident trusts; GOV.UK: Reforming the taxation of non-UK domiciled individuals (TIIN); HMRC Manual: IHTM47022 Excluded property in a settlement at 30 October 2024; HMRC Manual: IHTM47052 Foreign settled property, relevant property; GOV.UK: Budget 2026, Overview of tax legislation and rates; GOV.UK: Verify your identity for Companies House; GOV.UK: People with significant control (PSCs); GOV.UK: Statutory guidance on significant influence or control (2026); GOV.UK: Money laundering supervision for trust or company service providers