PruAdviser on-line services will be unavailable from 20:00 on Saturday 17 April until 12:30 on Sunday 18 April for website maintenance.

10 things you Absolutely need to know about Bare Trusts

Session: 3 December 2020    

Bare and absolute trusts have always been part of the financial planning sphere and are perhaps seen as a relatively simple solution compared to Discretionary Trusts.

But they're not as simple as you would imagine. For example, Bare Trusts created on death have their own particular nuances. And what happens when a beneficiary pre deceases a settlor? Where might they fit in an individual’s overall planning?

On this webinar, Graeme Robb, Senior Technical Manager will have helped you gain a better understanding of:

  • The use of Absolute trusts in lifetime planning
  • Absolute/Bare trusts created on death
  • The income tax, CGT and IHT treatment of Bare/Absolute trusts
  • Planning considerations when using Bare/Absolute trusts

Presenter – Graeme Robb – Senior Technical Manager

Test your knowledge


1. A Bare Trust is one in which:

    a) The beneficiary Is entitled to income and may receive capital once they attain 21

    b) The beneficiary is entitled to capital and may receive income once they attain 25

    c) The trustees can decide when the beneficiary will benefit

    d) The beneficiary has an immediate and absolute title to both income and capital
 

2. The test of a Bare Trust according to HMRC is whether the trust funds have:

    a) Indirectly vested in the beneficiary

    b) Independently vested in the beneficiary

    c) Indefeasibly vested in the beneficiary

    d) Ideally vested in the beneficiary
 

3. If a parent dies and minor children benefit under intestacy then a statutory trust arises. Is this a Bare Trust?

    a) Yes always

    b) No never

    c) Yes in England and Wales only

    d) Yes in Scotland & Northern Ireland only
 

4. If a Bare Discounted Gift Trust has been set up, can adult beneficiaries demand their share of the trust fund while the donor is still alive?

    a) Yes always

    b) Never

    c) Only if Scots law applies

    d) The trustees can distribute part of the trust fund if the donor’s rights to the pre-selected payment stream aren’t adversely impacted.
 

CPD certificate

To claim your CPD certificate, click here.

"Prudential" is a trading name of Prudential Distribution Limited. Prudential Distribution Limited is registered in Scotland. Registered Office at Craigforth, Stirling FK9 4UE. Registered number SC212640. Authorised and regulated by the Financial Conduct Authority. Prudential Distribution Limited is part of the same corporate group as the Prudential Assurance Company. The Prudential Assurance Company and Prudential Distribution Limited are direct/indirect subsidiaries of M&G plc, a company incorporated in the United Kingdom. These companies are not affiliated in any manner with Prudential Financial, Inc, a company whose principal place of business is in the United States of America or Prudential plc, an international group incorporated in the United Kingdom.