Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Trust definition

What does Trust mean? A trust is a legal arrangement in which one or more trustees hold and manage property (the trust property) for the benefit of beneficiaries. It is primarily defined by case law rather than a single statute, though key rules appear in legislation (for example, writing requirements and trustee powers). Trusts arise by express declaration (usually by a settlor), by operation of law (resulting or constructive trusts), or under statute, and are used in private client, commercial, pension and charitable contexts. Core features include: the trustee’s fiduciary duties to act loyally, prudently and in accordance with the trust terms; control...

TCGA 1992 s 86 UK offshore trusts: attribution of gains to settlors; protected and grandchildren's settlements; Sch 5 tainting conditions, exceptions, deemed domicile and Finance Act 2025 reforms

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Practice notes

STOP PRESS: Abolition of non-dom regime and introduction of residence-based IHT regime

Finance Act 2025 (FA 2025), which secured Royal Assent on 20 March 2025, enacts the end of the remittance basis and brings in a residence-based system from 6 April 2025. FA 2025 also makes residence, rather than domicile, the determinant for inheritance tax exposure.

Further measures include:

Revisions to the rules for excluded property status
Removal of the protected settlements status of offshore Trusts
Alterations to overseas workday relief

For guidance on these reforms, see Practice Notes: The abolition of the remittance basis of taxation from 2025–26 and A new residence-based regime for IHT from 2025–26. See also: Finance Bill Tracking Service: Key dates (Finance Bill 2025) and Finance Act 2025.

Under section 86 of the Taxation of Chargeable Gains Act 1992 (TCGA 1992), where a UK resident and domiciled Settlor has an “interest” in a trust and the settlement is “qualifying” for the purposes of that section, gains realised by the trust are attributed to that settlor. For the meaning of “interest” and “qualifying settlements” under TCGA 1992, s 86, see Practice Note: Offshore trusts—Attribution of income to settlors...

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Web page updated on 22/05/2026

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