Does your jurisdiction recognise trusts?
Trusts are recognised by and may be established under the law of England and Wales.
Trusts established under the laws of other jurisdictions are recognised in England and Wales both under the general law and under the Hague Convention on the Law Applicable to Trusts and on their Recognition, 1 July 1985, which is applicable in the UK.
In certain circumstances, an express trust (one where there is a clear and expressed intention to create a trust, usually within a written document) must be registered on the UK trust register and specified information provided regarding the trust and its settlor and beneficiaries. UK-resident express trusts must be registered where there is a tax liability for any trust income or assets under any of the following taxes:
- Capital Gains Tax (CGT);
- income tax;
- Inheritance tax (IHT);
- Stamp Duty Land Tax (SDLT); and
- Stamp Duty Reserve Tax (SDRT) or stamp duty.
Non-UK resident express trusts must be registered where there is a tax liability for any of the above taxes in respect of UK source income or UK assets. The deadline for registration will depend on the tax liability that triggers the registration requirement.
The scope of the requirement for trustees to register their trust has been extended under the terms of the EU's Fifth Money Laundering Directive (5MLD) which came into force on 9 July 2018, and was transposed into UK law with effect from 10 January 2020. Its provisions relating to the expansion of the requirement to register trusts came into force on 6 October 2020.
From this date, unless a trust is specifically exempted, all UK express trusts are subject to the requirement to register. The requirement also extends to non-UK trusts that either acquire an interest in UK land or that have at least one UK trustee and enter into a business relationship with a relevant person in the UK, for example, a lawyer or accountant. Furthermore, access to information on the register will be extended to persons who demonstrate a 'legitimate interest' in the beneficial ownership of a trust. In respect of certain trusts, information must also be made available to a person who makes a written request, regardless of whether they have demonstrated a legitimate interest.
The deadline for registration of trusts that fall within the extended registration requirements before 9 February 2022 will be 10 March 2022. From 9 February 2022 onwards, registration will be required within 30 days of the event that triggers registration.
Does your jurisdiction recognise private foundations?
There is no specific law of private foundations in England and Wales. Neither is there any specific legislation dealing with the recognition of foreign private foundations. Under the general law, foundations governed by the laws of other jurisdictions may be recognised by the courts of England and Wales and they are likely to be treated according to whether their characteristics are most closely aligned to companies or trusts.
England & Wales Guide
The England & Wales guide answers the principal questions for Private Clients relating to the law in this jurisdiction.
