TSEM6038 - Legal background to trusts & estates: secret or half-secret trust

A will may provide for property to pass to a particular individual. However the testator has previously instructed the designated recipient that the property was to be held on particular trusts. This kind of arrangement is known as a ‘a secret trust�. Internal users should refer all of these cases to Trusts Technical. See TSEM11100.

HMRC will accept the arrangement (as a trust created by the testator) only if it meets certain conditions. Before death the testator must have given the apparent legatee details of the trust. »Ê¹ÚÌåÓýapp trustees must have accepted the resultant obligations.

A half-secret trust is similar. »Ê¹ÚÌåÓýapp will specifies passes the property to a legatee ‘on trustâ€�, without giving other instructions. »Ê¹ÚÌåÓýapp testator must have

  • instructed the trustees, or
  • written instructions for later transmission to the trustees
  • when he made out the will, or before that date.

Again, internal users should refer all of these cases to Trusts Technical. SeeTSEM11100