In Lily P Tang v HMRC [2018] TC 6965 the FTT decided that a bare trust for a family member can exist without formal documents if that is supported by other evidence.  

  • The taxpayer had more than $900,000 in a bank in Singapore.
  • She said that this was being held in a bare trust for her parents-in-law who realised the sum from the sale of a restaurant business and from an inheritance
  • She administered the account entirely in accordance with the parents’-in-law instructions, as was evidenced by bank statements
  • She worked as an NHS midwife. Her husband worked in a bank. Their earnings did not allow them to accumulate such a large amount as savings.
  • There was no trust deed, but the parents in law provided a statement that the funds were held in a bare trust.

HMRC took the view that without a deed, no Trust could exist in law. 

The tribunal found that the evidence clearly showed a bare trust had been created. As such, Mrs Tang was a trustee and the trust's income was not taxable in her hands.

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External links

Lily P Tang v HMRC [2018] TC 6965