Bare Trusts - who are you advising??

I'm hoping one of the Trust gurus on here can help me out with this one.... I fear I am over thinking and over complicating what should be a simple case.....

Our client is Mother. She is gifting a fairly large sum to each to her 3 children. 2 live in UK. Simple. Daughter lives in Australia. We don't have passporting for Aus.

Option 1. Mother gifts cash and it sits there until Daughter returns to UK. Not ideal. Could be at least 3 years, maybe more.
Option 2. Mother invests for now on behalf of daughter and gifts on return to UK, but then there could be CGT issues at that point, as Mother actively uses all allowances already.
Option 3. Bare Trust. Mother gifts to daughter, but holds in her name in a designated account. This would need to be reported as an asset/income/gains by Daughter in Aus. Bare Trust would need to be registered on TRS.

Option 3 is where Mother is leaning towards, but as it isn't a normal discretionary trust, where we would just advise the Trustees, who are we advising on a Bare Trust? Are we advising Mother as 'trustee' or custodian as we usually would, or as it's a Bare Trust, are we considered to be advising the Daughter?



Ruth Baker


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