Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 section Schedule 8 paragraph 2

Bare trusts and settlements: definitions

Schedule 8 paragraph 2 defines two key types of trust arrangement for land transaction tax purposes: "bare trusts" and "settlements".

• A bare trust is a trust where the trustee holds property for one or more beneficiaries who are absolutely entitled to it, including arrangements where a person holds property as nominee for another.
• Beneficiaries who are under 18 or who lack mental capacity are still treated as absolutely entitled for this purpose, even though they cannot personally manage the property.
• Being "absolutely entitled" means having the exclusive right to direct how the property is dealt with, subject only to the trustee's right to recover any outstanding taxes, duties, costs or other outgoings from the property.
• A "settlement" is defined simply as any trust that is not a bare trust.