The Direct Path

Bare Trust

A Bare Trust is the most transparent form of trust — assets are held in the beneficiary's name from the moment of creation, with the trustee acting as a simple custodian until the beneficiary is ready to take control.

How a Bare Trust Works

Unlike Discretionary or Property Protection Trusts, a Bare Trust offers no flexibility in distribution. The beneficiary's entitlement is absolute and indefeasible — the trustee holds legal title, but the beneficiary holds the entire beneficial interest from day one.

Once the beneficiary reaches the age of 18 (in England and Wales), they can demand the transfer of the trust assets into their own name at any time. The trustee has no power to refuse.

This makes the Bare Trust the most straightforward and tax-efficient trust structure available — but its simplicity means it is only appropriate where unconditional inheritance is the clear intention.

Common Applications

Gifts to Children: Holding cash, investments, or property gifted by parents or grandparents until a child turns 18.
Inheritance for Minors: When a Will leaves assets to a beneficiary under 18, a Bare Trust provides the holding mechanism.
Junior ISA Equivalents: Structuring family savings for a child with tax-efficient treatment under the child's personal allowance.

Key Advantages

01

Absolute Entitlement

The beneficiary has an immediate and unconditional right to the trust assets. There is no discretion — the trustee's role is purely custodial until the beneficiary reaches 18 or claims the assets.

02

Tax Transparency

Income and capital gains arising from trust assets are taxed as the beneficiary's own, not at trust rates. For beneficiaries with unused personal allowances, this can result in significant tax savings.

03

Simplicity and Low Overhead

With no discretionary decisions required, Bare Trusts involve minimal administrative burden. There are no complex trustee meetings or distribution considerations — the structure is clean and direct.

04

Ideal for Minors

The most common use of a Bare Trust is holding assets for a child until they reach 18. The trustee manages the assets in the interim, but the child's entitlement is fixed from the outset.

Bare Trust vs. Other Structures

Feature	Bare Trust	Discretionary Trust	Property Protection Trust
Beneficiary's Right	Absolute	At trustee discretion	Life interest only
Trustee Discretion	None	Full	Limited
Tax Treatment	Beneficiary's rates	Trust rates	Depends on structure
Flexibility	Minimal	Maximum	Moderate
Complexity	Low	High	Moderate

Secure Your Family's Future

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