If you’ve got property in the UK and assets elsewhere, sorting out your affairs can get complicated fast.
Between different countries’ tax rules, inheritance laws, and paperwork, it’s easy for things to slip through the cracks, especially when you’re thinking about how to pass things on.
And if you don’t have a solid plan in place, your family might end up facing delays, double taxes, or even legal disputes.
That’s where trust planning comes in. It’s a smart, flexible way to make sure your assets go where they should, no matter where in the world they are.
What Is a Trust and How Does It Work in the UK?
A trust is a legal arrangement where a person (the settlor) transfers assets to another party (the trustee), who manages them on behalf of a third party (the beneficiary).
In the UK, trusts are often used as part of estate planning, wealth management, and increasingly, for protecting cross-border assets.
What makes trusts so useful is the separation of legal ownership and beneficial interest. This means the trustee holds legal title to the assets, but the beneficiary enjoys the benefits. In an international context, this structure gives individuals with assets in multiple countries control, reduces exposure to different legal systems, and ensures continuity in wealth distribution.
The UK recognises several types of trusts, and its common law system offers flexibility, especially for non-UK residents. However, trust laws can differ significantly from country to country, so if you’re dealing with assets outside the UK, it’s essential to understand how they’ll be treated under both UK law and local laws in other jurisdictions.
HMRC provides a useful guide on trusts and taxation in the UK.
Why Use a Trust for Cross-Border Assets Protection?
Owning assets across borders can be exciting, but it also brings its fair share of complications.
Different tax systems, legal rules, reporting requirements, and inheritance laws can make it difficult to manage or pass on wealth smoothly.
A trust allows you to place your assets under a single structure that can outlast you, while ensuring that your intentions are carried out across jurisdictions.
For example, if you have property in the UK but also investments or family businesses abroad, placing them in a well-structured trust can help simplify administration and avoid local probate issues in multiple countries.
Trusts offer structure. They can help protect vulnerable beneficiaries, manage succession in complex family setups, and even guard assets from political or economic instability in certain jurisdictions.
For many internationally mobile individuals or families with assets in different countries, trust planning is a vital part of securing the future.
What Types of Trusts Should You Consider?
The right structure often depends on your residency status, where your assets are located, and how you intend to pass them on.
For non-UK residents or those with international interests, a few types of trusts tend to stand out.
Discretionary trusts are popular because they offer flexibility. The trustees have control over how and when to distribute assets, which can be helpful if you’re dealing with beneficiaries in different countries or want to maintain some control over inheritance.
Interest in possession trusts, on the other hand, give a named beneficiary the right to income from the trust while preserving the capital for others, ideal if you’re balancing the needs of different generations or family members in multiple jurisdictions.
Each of these options comes with its own tax implications and legal requirements, so it’s essential to seek advice before setting anything up. The goal is to match the trust structure with your long-term plans and the tax regimes of the countries involved.
You can learn more about the types of UK trusts on the government website.
Setting Up a Trust: What to Know Before You Start
Setting up a trust in the UK isn’t just about signing paperwork and naming a few beneficiaries. There are legal, tax, and administrative responsibilities involved and getting it wrong can lead to unexpected costs or compliance issues down the line.
First, you’ll need to decide on the purpose of the trust. Is it to protect family wealth, reduce your exposure to UK inheritance tax, or manage assets across multiple countries? Clarity on your goal helps you and your advisor determine the most suitable trust structure.
Next, think carefully about who will act as trustees. These individuals (or professional services) will be responsible for managing the trust’s assets and making decisions, so it’s crucial to choose people you trust, especially when dealing with assets in different countries and legal systems.
You’ll also need to draft a trust deed, a legal document outlining the terms of the trust, including who benefits, how assets should be managed, and any restrictions or instructions you want to include.
Once the trust is established, registering with HMRC’s Trust Registration Service (TRS) is often required, particularly if the trust is liable to UK taxes or holds UK-based property. You must also keep detailed records, file annual tax returns if applicable, and ensure full transparency if beneficiaries live outside the UK.
Finally, make sure you’re aware of reporting obligations under international tax agreements, like the Common Reporting Standard (CRS), which can affect trusts with beneficiaries or assets in multiple jurisdictions.
It’s a complex process, but done properly, trust planning can provide lasting peace of mind and robust protection for your international estate.
Conclusion
Trust planning is a practical step for anyone with international ties who wants more control over how their wealth is managed and passed on.
With the right structure in place, a trust can help you protect your assets, reduce tax exposure, and ensure that your plans are respected across borders.
An experienced adviser can also walk you through the options, tailor the structure to your needs, and help you stay compliant in both the UK and abroad. Giving you peace of mind that your legacy is secure.
Hope you found this useful!
Meet Mo
Mo is experienced in dealing with clients from start-ups and expanding businesses for UK property investors in the retail and hospitality sector. He also brings his extensive experience in setting up and managing hotels, cafes, restaurants and rental properties across the UK to help clients achieve their business goals and succeed.
He regularly shares his knowledge and best advice here on his blog and on other channels such as LinkedIn.
Book a call today to learn more about what Mo and Monarc Finance can do for you.
