Understand how trusts impact property ownership and inheritance

What happens to property left in a trust

By Benham and Reeves

May 9, 2025, 1:28 IST

A trust is a legal structure that allows property owners to transfer assets while managing Inheritance Tax

What is a trust

A trust involves a settlor who creates the trust, a trustee who manages it, and a beneficiary who receives income or assets

Who is involved in a trust

A bare trust gives full control at 18, an interest in possession trust provides income without ownership, and a discretionary trust allows the trustee to decide distributions

Types of trusts for property owners

An accumulation trust reinvests income, a mixed trust combines benefits, a disabled trust offers tax relief, and a non-resident trust applies to trustees outside the UK

More types of trusts

Trusts help pass assets to future generations, protect property from creditors, provide for minors, and allow control over how assets are distributed

Why set up a trust

A spouse may be granted life interest to live in the home, the trustee manages maintenance costs, and if sold, the proceeds are split according to the trust deed

What happens to property in a trust

Choosing the right trustee, creating a clear trust deed, registering with HMRC, informing the land registry, and maintaining financial records are all essential steps

Things to consider before setting up a trust

Setting up a trust is a serious financial decision that requires legal and financial advice before moving forward

Should you put a property in a trust

Benham and Reeves provides expert advice to help you make the right decision

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