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Trustees – Charities and Trust Funds

What does being a trustee mean?

Being a trustee is often an important way to help a friend or family member. It means you take responsibility for money that’s been set aside in a trust for someone else or for a charity. You’ll manage the money for the individual or the charity, and only use it in their best interest and obey the rules of the trust.

For charities, trustees play a very important role in making sure the charity is run in the interests of those who it supports. They are also responsible for the overall management of the charity although often not on a day to day basis.

Trustee – Charity

Why become a Charity Trustee?

Being a trustee can be very rewarding and gives an opportunity for professional personal development. You can get involved in a cause that is personal to yourself or your family. Being part of a team you will have a chance to apply your skills and learn from others.

What do you need to consider when becoming a charity trustee?

Do you have the time to commit to being a trustee? Charities vary on when and where they meet and the range of activities you will be expected to be involved with.

Each organisation is different and it’s very important that you are realistic about what time you can give and what skills you have.

There are certain criteria which may prevent you from being a trustee – such as being bankrupt or having an IVA or any convictions including those that involve dishonesty or deception.

You can find more information about becoming a trustee by clicking the link to the Charity Commission guidelines here.

If you are a lead trustee you will be responsible for ensuring the Trust Registration Service documentation is correct and that any tax owed by the Charity is paid.

Trustee – Asset Management

Individual Beneficiaries & Trusts

Trusts in tax planning can be an extremely effective tool when looking at family succession or asset protection. They work in that an individual (the settlor) wants to make a gift of an asset to another person (the beneficiary) but instead of giving it direct they trust another party (the trustee) with the instructions on how the asset should be managed.

Common scenarios are:

  • Parents wishing to retain some form of control over assets handed down to children and grandchildren
  • Fears over divorce or when dealing with protecting assets in a second marriage
  • Concerns that the asset might be quickly wasted away if an outright gift were made
  • Flexibility over who can benefit, including future generations

Trustees & Tax

Tax can be an issue for both Trustees and Beneficiaries so its important to discuss options thoroughly before placing any assets in a trust. Its also very important that all parties are aware of the tax implications of the trust.

As a trustee you could be involved in the payments of:

  • Capital Gains Tax
  • Income Tax
  • Inheritance Tax

Trusts can be a great tool as part of an Income Tax, Inheritance Tax and Capital Gains Tax planning strategy.

Haines Watts

At Haines Watts we have a wealth of experience in dealing with Trusts, Trustees and beneficiaries of trusts. Tax Planning and advising in what can be a complicated part of UK Tax is essential when it comes to managing assets.

Whether you are looking for an Independent Examination for a Charity, guidance on the legal obligations of being a charity trustee or looking to organise a trust for your own estate we have the tax knowledge to discuss all your options. We work with wide range of Not-for-Profit organisations – read more here.

Contact our tax team now on 01379 640555 to see how we can help you.

Want to know more? Call us on 01842 760 007 or email

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