Trustee Bank Accounts from the high street?

I am finding it increasingly difficult to locate a simple current account for trustees. Is it possible to simply open a simple high street joint account in the names of the trustees instead?

Ian Wells
Emery Little

I know someone that has done this because of that exact difficulty. They have then prepared a simple Declaration of Trust stating that the account funds are not theirs personally, but the funds belong to the Trust and they hold them as a Trustee.

Mark Goodson
BTMK Solicitors

If you open a joint account in the trustees names, when a trustee dies, their share of the cash will be in their estate for IHT purposes, not in the trust. In a trustee account, all the cash always belongs to the trust. Barclays offer trustee accounts, but in my case their service was not very good in setting up the account.

Geoff Parker

Twice this year Barclays have assisted - in both cases Executors / Trustees held accounts with Barclays but it did not seem to be a pre-requisite.

Caroline Coles

Geoff -I don’t think that’s right. The monies still belong to the individuals qua trustee. The label on the account doesn’t matter. Worst case, you might need to demonstrate to HMRC that the monies are a trust asset.

Andrew Goodman
Osborne Clarke LLP

Surely, it does not follow (as Geoff Parker suggests) that funds held by trustees in a bank account fall into their individual estates on death?

The trustees are simply holding funds on trust for the beneficiaries.

Malcolm Finney

You may well be right from a legal point of view, although I did get my information from a solicitor posting on another forum. There are practical problems, however, one which you mentioned with HMRC, but perhaps a more immediate one in that if money is invested in shares on an brokers platform, I have found that they will only pay out money to a trustee account (ie an account in the name of the trust), and not to a personal account.

Geoff Parker

Hi Ian

My first thought would be do you really need an account. If you have a broker portfolio they will usually manage the cash for you. This is a much simpler more cost effective route than using a bank account.

If you do have to open an account then Handelsbanken and Cater Allen do them.

Re the suggestion that the Trustees use an ordinary personal account I think that when applying for a bank account you need to say who the beneficial owners are. Obviously the trustees are not the beneficial owners and so the existence of the trust will need to be made clear to the bank.

I would also be unhappy about Trustees being behind an ostensibly personal account for all sorts of reasons including FATCA, CRS, and as people have mentioned the risk of HMRC asserting that the funds belong to the trustees personally. Even if that is not correct the argument still has to be gone through. Also if the trustees have not been entirely honest with the bank when opening the account, then this has to raise to HMRC and anyone else involved the question of whether they have been entirely honest in their other dealings, in whatever capacity.

Sara Spencer

In his latest post, Geoff Parker touches on an issue that is likely to become more relevant if financial institutions start matching the name of the intended payee to the account that they are instructed to credit. I note from the media that this should come into being in the first half of 2020. As this is intended as a method of helping to counter fraud, the frequency of credits to an account bearing a different account name could be taken to suggest inappropriate activity and perhaps result in the account being frozen under the anti-money laundering procedures and the account holders being reported to the authorities.

Some might think this rather far-fetched, but as the financial institutions are currently receiving a lot of bad press for not matching up the name of the intended account with the actual account name, I would not bet against it.

There is, of course, the issue that when opening an account, the account holders have to warrant that they are beneficially entitled to the balance on the account (once opened). I believe they also have to warrant that the information they provide is true. By opening a “personal” joint account and using it as a trustee bank account, I wonder if this might be seen as a breach of AML rules and have potentially negative reputational issues. Whilst private individuals might feel they are happy to adopt the risk, that may not be the case for professionals and others who might be subject to some form of regulatory arrangement.

Paul Saunders

The problem is generally with the bank’s T&Cs, which ask you to confirm that the funds are held beneficially and not on trust. Try Metro Bank; they let me do what you describe. I didn’t like their trustee account, so asked whether I could just open a normal account in the name of one or more of the trustees. They were - delightfully - fine with it.

Caroline Furze
Wilberforce Chambers (retired)

Give Stephen Buckland a call. Hampden & Co 020 3841 7498.

Cindy Chaplin
Larking Gowen

Santander have a “business account” which is held in the name of our trust. There is no cheque book facility but normal online banking transactions can be conducted by the named trustees.

Hugh Fordham

I don’t know about high street bank accounts, but I am aware that Cater Allen offer straightforward trustee bank accounts - they might be worth a look.

Rebecca Pryce