Explaining Beneficiary Rights to Trust Information

If you are appointed as the trustee of a trust, you will have a range of responsibilities. Helping you understand these duties, Prestige outlines explain what rights a beneficiary has to trust information.

Creating trusts

A trust is created via a document called a trust deed. There are three parties named in a trust deed – the settlor – the person who places assets in the trust, trustees – the people who legally owns these assets and manages the trust i.e. you and beneficiaries – who benefit from the trust. Once the trust deed has come into effect, you will have certain responsibilities towards its beneficiaries.

Trustee responsibilities

Your role as a trustee will primarily oblige you to manage the assets held in the trust, according to provisions set down by the settlor in the trust deed. This encompasses range of tasks, from deciding how to invest trust property, to taking care of day-to-day duties, such as paying any tax due on trust income. You will also be required to relay certain information to beneficiaries, should they request it.

We should point out that beneficiaries cannot, generally, ask you to release any documents pertaining to trustee decision-making e.g. trustee meeting minutes. However, beneficiaries can request the trust deed, to learn the provisions set out for the trust created on their behalf. Beneficiaries can also ask you for any deeds of appointment/retirement, as well as the trust’s accounts e.g. its tax and income.

Reporting tax and income

It is important to note that after you are appointed as a trustee, you will need to register the trust with HM Revenue & Customs (HMRC) for tax purposes. Once this has occurred, you will be required to report the trust’s income and any gains accrued to HMRC by sending tax returns each tax year. You do not have to send this information to beneficiaries, unless they ask for it.

In order to provide beneficiaries with a statement detailing the trust’s tax and income, use form R185 (trust). We should note that you can also use form R185 (settlor), should you also be required to send a statement detailing tax and income to a settlor who retains an interest in the trust. In the following two instances, you will be required to supply a beneficiary with additional information if…

  • You make a payment financed via a taxable lump sum from a pension scheme.
  • The pension holder has passed away.

In these instances, you will have 30 days following the request to report the amount paid to the trust before tax and the amount of tax paid on the lump sum to beneficiaries. We should also point out that if the trust of which you are trustee has more than one beneficiary, you must provide them with this information, on a relative basis, depending on the amount they receive monetarily from said trust.

Prestige Tax and Trust Services

Beneficiaries will typically request trust information when they hold concerns over how the trust is being managed. In some cases, it may be hard for you to determine which information you need to submit to beneficiaries, so it is wise to enlist guidance. As experts in this field, Prestige Tax and Trust services can provide advice on trust matters, ensuring that you fulfil your responsibilities as a trustee.

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