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Trusts

Legal • Trusts

Planning for More Involved Personal and Financial Circumstances 

While a standard will may be suitable for many individuals, some situations require a more detailed and carefully structured approach. Where assets, family arrangements, or residency span multiple jurisdictions, a more considered framework is often needed to ensure that a will functions as intended. 

A complex or international will is designed to reflect these broader considerations. It takes account of factors such as overseas assets, cross-border family structures, differing legal systems, and the interaction between UK law and other jurisdictions. 

At Hoxton Wealth, the focus is on helping clients navigate these additional layers with clarity. The aim is not to make the process more complicated than necessary, but to ensure that all relevant elements are understood and addressed in a structured and coordinated way. 

Learning Resources

Structured Planning for Asset Protection and Control

A trust is a legal arrangement that allows assets to be held and managed by one party for the benefit of another. Trusts are commonly used in UK estate planning to provide control, protect beneficiaries, and manage how and when wealth is distributed. 

While trusts can appear complex, their purpose is often straightforward: to ensure assets are handled in line with personal wishes, particularly where direct or immediate transfer may not be appropriate. 

At Hoxton Wealth UK, trusts form part of a broader Estate Planning and Legal Services framework. The firm works with clients to assess whether a trust may be suitable in the context of their overall financial and family situation, coordinating with qualified legal professionals for formal drafting and implementation. 

What Is a Trust?

A trust typically involves three roles: 

  • Settlor – the person who places assets into the trust 

  • Trustees – the individuals or professionals responsible for managing the trust 

  • Beneficiaries – those who may benefit from the trust assets 

The trustees have a legal duty to manage the assets in accordance with the trust deed and in the best interests of the beneficiaries. 

Trusts can hold various assets, including property, investments, cash, and life assurance policies. 

Why Consider a Trust?

Trust planning may be appropriate where clients wish to: 

  • Control how and when beneficiaries receive assets 

  • Protect wealth for younger or vulnerable beneficiaries 

  • Provide for children from previous relationships 

  • Mitigate certain inheritance tax exposures 

  • Protect family wealth across generations 

  • Ringfence assets in complex family situations 

Every family and financial structure is different. The suitability of a trust depends on personal objectives, tax position, and long-term intentions. 

Common Types of Trusts in the UK 

There are several types of trusts commonly used in UK estate planning. 

Discretionary Trusts 

Under a discretionary trust, trustees have flexibility in deciding how and when beneficiaries receive income or capital. This can provide adaptability where future circumstances are uncertain. 

Discretionary trusts are often used for inheritance tax planning, asset protection, or where beneficiaries are minors. 

Bare Trusts 

In a bare trust, the beneficiary has an immediate and absolute right to both capital and income. Trustees manage the assets until the beneficiary reaches the age of 18 (or 16 in Scotland), but the assets legally belong to the beneficiary. 

These trusts are simpler in structure but offer limited flexibility. 

Interest in Possession Trusts 

An interest in possession trust provides a named beneficiary with the right to income generated by the trust assets, while the capital passes to other beneficiaries at a later stage. 

These are sometimes used in second marriage situations to provide income for a surviving spouse while preserving capital for children from an earlier relationship. 

Trusts Within Wills 

Many trusts are created through a Will and only take effect upon death. These can provide additional control over asset distribution and may help manage tax exposure where appropriate. 

Further context on Will planning can be found within our Wills page and broader estate planning framework . 

Inheritance Tax and Trusts 

Trusts can have inheritance tax implications both when created and during their lifetime. 

Key considerations may include: 

  • Potential inheritance tax charges when assets are transferred into trust 

  • Ten-yearly periodic charges for certain types of trust 

  • Exit charges when assets leave the trust 

  • Interaction with available nil-rate bands and exemptions 

Trust taxation is complex and subject to change. Careful analysis is required before establishing any arrangement. Hoxton Wealth UK works alongside tax advisers and legal professionals to ensure clients understand potential liabilities and compliance obligations. 

Tax treatment depends on individual circumstances and prevailing legislation.

Ongoing Responsibilities of Trustees 

Being a trustee carries legal and administrative responsibilities. These may include: 

  • Acting in accordance with the trust deed 

  • Managing investments prudently 

  • Keeping accurate records 

  • Filing tax returns where required 

  • Acting in the best interests of beneficiaries 

In some cases, clients choose professional trustees to ensure continuity and governance. In others, trusted family members are appointed. 

Hoxton Wealth UK can support trustees with investment oversight and reporting, ensuring trust assets remain aligned with agreed objectives. 

Trusts and Financial Planning 

Trust planning should not sit in isolation. It should integrate with: 

  • Retirement income planning 

  • Pension beneficiary nominations 

  • Life assurance arrangements 

  • Wider inheritance tax strategy 

  • Long-term care considerations 

As outlined in our broader retirement planning guidance , joined-up financial planning helps ensure structures work together coherently rather than creating unintended complexity. 

Trusts may also be used to hold life assurance policies outside the estate for inheritance tax purposes, although suitability depends on individual circumstances.

When Might a Trust Not Be Appropriate? 

Trusts involve administration, potential tax reporting, and ongoing compliance. They are not suitable for every situation. 

In some cases, simpler solutions such as updated beneficiary nominations, direct gifting strategies, or straightforward Will structures may achieve similar outcomes with less complexity. 

The decision to establish a trust should be made only after careful review of objectives, tax position, and long-term intentions. 

How Hoxton Wealth UK Supports Clients 

Hoxton Wealth UK provides structured guidance to help clients consider whether a trust may be appropriate. This includes: 

  • Clarifying estate planning objectives 

  • Reviewing current asset ownership 

  • Identifying potential tax exposures 

  • Coordinating with legal professionals for drafting 

  • Supporting trustees with ongoing investment management 

  • Ensuring alignment with wider financial planning 

Hoxton Wealth UK does not provide standalone legal advice unless appropriately authorised. Trust deeds must be drafted by qualified legal professionals. 

The firm’s role is to ensure financial structures are aligned with broader wealth planning objectives and regulatory requirements.

FAQs

Getting Started 

Trust planning can offer structure and clarity where family circumstances, asset protection concerns, or tax considerations require a more controlled approach. 

As part of its Estate Planning and Legal Services offering, Hoxton Wealth UK helps clients evaluate whether trusts are appropriate and coordinates with legal professionals to implement suitable arrangements. 

To arrange a confidential discussion about trust planning and estate strategy, please contact Hoxton Wealth UK. 

Important Information 

This content is provided for general information only and does not constitute legal or tax advice, nor a personal financial recommendation. The suitability of any trust arrangement depends on individual circumstances. Tax rules may change and their effect will depend on personal factors. 

Trust creation and drafting must be undertaken by appropriately qualified legal professionals. Hoxton Wealth (UK) Ltd, Company No. 11180844, is authorised and regulated by the Financial Conduct Authority (FRN 586130). Registered office: 101 New Cavendish Street, London W1W 6XH. 

Legal

How can Hoxton help

Various options are available to create a Will, from DIY Will kits to consulting a solicitor, obtaining a “free” Will from your bank or generating one online. However, each method comes with risks and may not be appropriate for your situation. An incorrectly drafted Will can result in unintended consequences, causing complications for your loved ones after you’re gone. Don’t take chances with the fruits of your entire life’s labour – trust Hoxton Wealth’s expertise in crafting a Will that fulfils your current and future needs. Get in touch today. 

Contact Hoxton Wealth

We are available to discuss how Hoxton Wealth can help you achieve your financial goals. Together, we can help you build a brighter financial future.