TRUSTS

What is a 'trustee'?

Trustees are the legal owners of the trust property. They are legally bound to look after the property of the trust in a particular way and for a particular purpose. Trustees administer the trust and in certain circumstances make decisions about how the property in trust is to be used.

The trust can continue even though the trustees might change, but there must normally be at least one trustee.

What is 'property'?

The property of a trust can include

• Money
• Investments
• Land or buildings
• Other assets, such as paintings

The cash and investments held in the trust are also called the 'capital' or 'fund' of the trust. This capital (or fund) may produce income, such as interest or dividends. The land and buildings may produce rental income.

What is a 'beneficiary'?

A beneficiary is anyone who benefits from the property held in the trust. There can be one or more beneficiaries, such as a whole family or a class or people, and each may benefit from the trust in a different way.

For example, a beneficiary may benefit from

• the income only, or
• the capital only, or
• both the income and the capital of the trust

What is a 'settlor'?

A settlor is a person who has put property into trust. Property is normally put into the trust when it is created, but it can also be added at a later date.

Is a settlement the same as a trust?

The words 'settlement' and 'trust' are sometimes used in place of each other, and to describe the same thing. For tax purposes, the term 'settlement' can have a wider meaning and can include various other arrangements and agreements.