英国遗产税对结果信托的适用：以他人名义持有的资产归属

In the 2022-23 tax year, HM Revenue & Customs collected £7.1 billion in Inheritance Tax (IHT), a record figure driven by frozen nil-rate bands and rising asset values, according to HMRC’s Annual IHT Statistics 2023. A critical and often misunderstood area of IHT law concerns resulting trusts—the legal mechanism that governs assets held in another person’s name but beneficially owned by someone else. Under UK IHT legislation (Inheritance Tax Act 1984, s.43-48), assets held on a resulting trust are not automatically treated as part of the legal owner’s estate for IHT purposes; instead, the beneficial interest typically falls back to the original contributor. This principle has profound implications for cross-border estates, joint property purchases, and family arrangements where title does not reflect true ownership. For example, if Mrs X contributed 70% of the purchase price for a property registered solely in her son’s name, that 70% share is held on a resulting trust for Mrs X, and upon her death it would form part of her estate for IHT calculation, not her son’s. The Office for National Statistics reported in 2023 that over 12% of UK residential properties are now owned jointly or in trust structures, making clarity on this point essential for estate planners. This article examines how resulting trusts interact with IHT, using anonymised case studies and statutory references to guide practitioners and asset holders through the complexities of beneficial ownership, gift with reservation, and cross-border asset tracing.

The Legal Basis of Resulting Trusts in UK Law

A resulting trust arises by operation of law when property is transferred to someone who holds the legal title but the beneficial interest “results back” to the transferor. This is distinct from an express trust, which is created deliberately. In the IHT context, the key distinction is that the legal owner (the trustee) does not have beneficial enjoyment of the asset, and therefore the asset should not be treated as part of their taxable estate. The House of Lords in Vandervell v IRC [1967] 2 AC 291 established that where a transferor fails to dispose of the entire beneficial interest, the undisposed portion remains with the transferor. For IHT purposes, this means that if Mr Y transfers £500,000 into a bank account held jointly with his niece, but the evidence shows he intended her to hold it as a bare nominee, that £500,000 remains in Mr Y’s estate. HMRC’s Inheritance Tax Manual (IHTM17032) confirms that resulting trusts are treated as bare trusts for IHT purposes, with the settlor retaining the beneficial interest. This treatment can work to the taxpayer’s advantage or disadvantage depending on the facts. Where a parent pays a deposit on a child’s home, a resulting trust may arise for the deposit amount, keeping that value within the parent’s estate and potentially using their nil-rate band (£325,000 for 2024-25) rather than the child’s lower allowances.

IHT Treatment of Resulting Trusts: The Core Principles

The IHT treatment of assets held on a resulting trust hinges on whether the transferor has retained a benefit or made a gift with reservation of benefit (GWR). Under s.102 of the Finance Act 1986, if the transferor continues to enjoy the asset (e.g., living rent-free in a property they contributed to), the entire asset may be pulled back into their estate, even if only part was legally theirs. This is a common trap for parents who help children buy a home and then continue to reside there. For example, Mrs A contributed 40% of the purchase price for her daughter’s house and lived there rent-free for three years before her death. HMRC successfully argued that the entire property was subject to GWR, resulting in IHT on 100% of its value, not just 40%. Conversely, where no benefit is retained, the resulting trust share is simply part of the contributor’s estate, subject to the normal nil-rate band and residence nil-rate band (RNRB, up to £175,000 for 2024-25). The burden of proof falls on the taxpayer to demonstrate that a resulting trust exists, typically through documentary evidence of contributions, correspondence, or a written declaration of trust. Without such evidence, HMRC may treat the transfer as an outright gift, potentially using up the transferor’s annual gift exemption (£3,000 per year) or falling into the seven-year rule for potentially exempt transfers (PETs).

Cross-Border Implications: Assets Held Abroad or by Non-Domiciliaries

For individuals with international connections, resulting trusts create additional complexity. A non-UK domiciled individual (a “non-dom”) who holds UK assets through a resulting trust may face IHT on the UK-situated asset, but the situs of the beneficial interest can be disputed. Under the UK’s domicile-based IHT system (s.6, IHTA 1984), only UK-situated assets of non-doms are chargeable. However, if a non-dom holds a beneficial interest in a UK property via a resulting trust, the asset is UK-situated and fully chargeable. Conversely, if the legal title is held by an offshore trustee, the situs may shift. In Russell v IRC [2023] UKFTT 87, a US-domiciled taxpayer argued that funds held in a Swiss bank account on a resulting trust for her benefit were not UK-situated; the tribunal agreed, saving approximately £1.2 million in IHT. For UK-domiciled individuals with assets abroad, a resulting trust over foreign property does not remove the asset from the UK IHT net—the beneficial interest follows the domicile of the settlor. The OECD’s 2023 report on cross-border inheritance taxation notes that 34% of international estates involve trust-like structures, with resulting trusts being the most common informal arrangement in common-law jurisdictions. Families using cross-border structures should document the trust relationship explicitly, as HMRC increasingly requests evidence of beneficial ownership under the Common Reporting Standard (CRS) and the Trust Registration Service (TRS), which now covers all UK-resident trusts regardless of tax liability.

The Interaction with the Nil-Rate Band and Residence Nil-Rate Band

The nil-rate band (NRB) of £325,000 and the residence nil-rate band (RNRB) of up to £175,000 are central to IHT planning, and resulting trusts can affect how these allowances are applied. If a deceased person held a beneficial interest under a resulting trust in a property that qualifies as their residence, that property may attract the RNRB, potentially reducing the IHT bill by up to £70,000 (40% of £175,000). However, the RNRB only applies where the property is “closely inherited” by a direct descendant (child or grandchild). In a resulting trust scenario, if the legal owner is not a direct descendant, the RNRB may be lost. For instance, Mrs B held a 50% beneficial interest in a flat registered in her brother’s name. On her death, the flat passed to her brother (the legal owner), not to her children, so the RNRB was unavailable. The estate paid IHT at 40% on the full value of her beneficial share. Conversely, where the resulting trust was properly documented and the property passed to a direct descendant, the RNRB was applied. The Institute for Fiscal Studies (IFS, 2024) notes that only 8% of estates claiming the RNRB in 2022-23 involved trust-held properties, suggesting many families miss this relief due to poor documentation. Practitioners should review whether a resulting trust interest can be transferred to a qualifying beneficiary before death, or whether a deed of variation can redirect the property post-death to secure the RNRB.

Practical Steps: Documenting and Proving a Resulting Trust

Given HMRC’s scrutiny of informal arrangements, documenting a resulting trust is essential. The ideal approach is a written declaration of trust executed at the time of the transfer, signed by both the legal owner and the beneficial owner. This document should specify the percentage shares, the source of funds, and any conditions (e.g., right of occupation). In the absence of a written declaration, HMRC will look at contemporaneous evidence: bank statements showing the transfer, correspondence mentioning the arrangement, and witness statements. The burden is on the taxpayer to prove the trust on the balance of probabilities. A 2023 survey by the Law Society found that 62% of disputed IHT cases involving family homes turned on the existence of a resulting trust, with the average cost of litigation exceeding £45,000. For cross-border transactions, some families use third-party platforms to manage and document such arrangements; for example, international estate planners may use channels like Airwallex global account to handle multi-currency transfers and maintain clear audit trails of contributions. The key is to avoid ambiguity: if a parent gives money to a child for a house purchase, state in writing whether it is a gift, a loan, or a contribution to a resulting trust. Without this, HMRC may treat it as a gift, potentially triggering IHT on the full value if the parent dies within seven years.

Case Study: Mr C’s Overseas Property and the Resulting Trust Trap

Mr C, a UK-domiciled businessman, purchased a holiday apartment in Spain for €400,000 in 2018. The property was registered in the name of his Spanish-resident sister, Ms D, because Spanish inheritance laws were more favourable for her. Mr C provided 100% of the funds, and Ms D held the legal title on a resulting trust for him. Mr C died unexpectedly in 2023, leaving an estate valued at £2.1 million. HMRC investigated and discovered that the Spanish property was held on a resulting trust. The property’s value at death was €450,000 (approximately £390,000). Because Mr C was UK-domiciled, the entire beneficial interest fell into his estate for IHT purposes. His estate had already used his nil-rate band on other assets, so the £390,000 was taxed at 40%, producing an additional IHT bill of £156,000. Mr C’s executors argued that Ms D was the legal owner and that the property should be treated as a gift, but the resulting trust analysis prevailed. The case illustrates that resulting trusts do not shelter assets from IHT—they simply clarify who the beneficial owner is. If Mr C had instead made an outright gift to Ms D and survived seven years, the property would have been outside his estate. The lesson is that resulting trusts are a tool for clarifying ownership, not for avoiding IHT. Cross-border property owners should consider whether a gift or a loan would better achieve their tax objectives, and document accordingly.

FAQ

Q1: Can a resulting trust be used to avoid Inheritance Tax on a property I give to my child?

No, a resulting trust does not remove the asset from your estate for IHT purposes. If you contribute to a property but retain the beneficial interest (via a resulting trust), that share remains part of your estate and is subject to IHT at 40% above the nil-rate band of £325,000. To avoid IHT, you would need to make an outright gift and survive for seven years (a potentially exempt transfer), or use the annual gift exemption of £3,000 per year. A resulting trust merely clarifies who owns the beneficial interest; it does not transfer it away.

Q2: What happens if I die and there is no written evidence of a resulting trust?

If you die without written evidence of a resulting trust, HMRC will presume the transfer was an outright gift unless your executors can prove otherwise on the balance of probabilities. In 2022-23, HMRC challenged over 1,400 estates on this basis, with an average additional IHT charge of £32,000 per case. Contemporaneous bank statements, emails, or witness statements may suffice, but the absence of documentation significantly increases the risk of the asset being treated as part of the legal owner’s estate or as a gift from you subject to the seven-year rule.

Q3: Does a resulting trust affect the residence nil-rate band (RNRB)?

Yes, it can. The RNRB (up to £175,000 for 2024-25) is available only if the property is inherited by a direct descendant. If your resulting trust interest passes to a sibling or other non-descendant as legal owner, the RNRB is lost. For example, if you hold a 50% beneficial interest in a property registered in your brother’s name, and on your death that interest passes to him, no RNRB applies. Only 8% of estates claiming the RNRB in 2022-23 involved trust-held properties, according to the IFS, indicating that many families miss this relief.

References

• HMRC, Inheritance Tax Statistics 2023-24, Table 12.1 (IHT receipts and nil-rate band usage)
• Office for National Statistics, UK Property Ownership and Trust Structures Report 2023
• Institute for Fiscal Studies, The Residence Nil-Rate Band: Uptake and Effectiveness 2024
• OECD, Cross-Border Inheritance Taxation and Trusts: A Comparative Analysis 2023
• Law Society of England and Wales, Litigation in Inheritance Tax Disputes: Survey Findings 2023