Bare trust - coporate trustee

CT, VAT and personal tax implications

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We have a client raising funds for specialist medical treatment (for herself). There is no charitable status etc.

Our client is sole director and shareholder of her own, VAT registered trading company.

In respect of a specific fundraising event, her bank has suggested using the company account. I'm of a mind that this will create a bare trust, with the director as beneficiary and the company as trustee.

Whilst I can find ample information on the consequences where the company is an SPV specifically set up to be trustee, I'm finding less information where the trustee is a trading company.

Can anyone point me to information regarding the VAT, CT and personal tax consequences of such a structure?

Replies (5)

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By Justin Bryant
21st Apr 2017 10:11

A company is a legal person, so can be a bare trustee just like any other legal person with capacity. With one or two very limited exceptions, tax generally ignores nominees, as is the case here, but it would be sensible to document the fact that it is so acting in relation to the relevant bank account monies.

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By SteveHa
21st Apr 2017 10:46

Thanks Justin,

So to be clear, any donations (which will be pretty much in and out of the bank account, are ignored for both CT and personal tax (I've since established that they are ignored for VAT purposes).

I would, of course, and as you have suggested, recommend that everything is properly documented.

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By Dick Stastey
21st Apr 2017 11:10

I'd find a different way of doing this. You'll spend the rest of your life trying to persuade HMRC/make them understand that these are not company transactions.

You know what a bunch of @rses they are, given that you were once one of the@rses.

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By SteveHa
21st Apr 2017 11:39

To be honest I'd be much happier if it was all done through a private account. The bank seem to be leading on this.

Having said that, it isn't a done deal yet, so potentially time to change.

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By kiwilondon99
21st Apr 2017 14:07

if the bank want it - let them set up a client account ? and really help their client achieve the end following their ownHeadline advise !

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