Glossary · UK
What is Bare Trust for Children?
A simple trust holding assets for a child absolutely, with no discretion for the trustee.
Full Definition
A bare trust holds assets for a named beneficiary absolutely — the trustee has no discretion and must hand the assets over once the beneficiary turns 18 (16 in Scotland). Bare trusts are commonly used by parents and grandparents to save or invest for children, but income and gains are usually treated as the child's own for tax purposes, subject to the "£100 rule": if a parent gifts the assets and the resulting income exceeds £100 a year, all of that income is taxed on the parent instead (this rule does not apply to gifts from grandparents or other relatives).
Read More
See Also
Disclaimer: Definitions are for guidance only. For decisions about your tax, savings, property or pension situation, always consult a qualified professional or refer to gov.uk.