As a trustee, Hargreaves Lansdown directed me to fill in a form to open an account for a Bare Trust when I had enquired about a Discretionary Trust. I queried the fact that the first section of the form required a signature for the settlor. I explained that they had passed away. They advised me to enter my own details in that section and again in the following section for the trustees.
I don’t want to waste time and I would be grateful if someone can advise whether this process is likely to stall somewhere down the line. Is a Bare Trust account suitable for a Discretionary Trust.The form can be downloaded using the button at the bottom of this web page.
I do not understand how HL can comply with its “Know Your Customer” (KYC) obligations I adopting this procedure. It seems to me that HL has a product which it is trying to get you to make your circumstances fit.
With a bare trust, HL would also require details of the beneficial owner in order to satisfy its regulator’s KYC requirements. If you are the trustee of a discretionary trust, how can you validly do so?
Once such an arrangement is set up, HL may be required to supply information to HMRC. If you have declare yourself to be the settlor, and are also an object to the trustee discretion, this could result in HMRC “assuming” the trust to be settlor interested, with the consequent tax implications.
Personally, I would be inclined to look elsewhere for an investment adviser with services designed for trustees. There are still quite a few around.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals