A Trust Deed, also known as a Declaration of Trust, is a formal legal document executed as a deed under English law that creates a trust and governs the terms on which the trustee holds assets for the benefit of one or more beneficiaries. In England and Wales, trusts are governed by a framework of statutory and common law rules, principally the Trustee Act 1925, the Trustee Act 2000, the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA 1996), the Law of Property Act 1925, and the Perpetuities and Accumulations Act 2009. The creation of a trust involves three essential elements, known as the ‘three certainties’: certainty of intention (the creator’s clear intention to create a trust), certainty of subject matter (the assets to be held on trust must be identifiable), and certainty of objects (the beneficiaries must be ascertainable with sufficient certainty).

The Trustee Act 2000 is the cornerstone of modern trustee duties in England and Wales. It introduces a statutory duty of care (section 1), requiring trustees to act with such skill and care as is reasonable in the circumstances, having regard to any special expertise they possess. The Act also confers a general power of investment (section 3) enabling trustees to invest in any asset as if absolutely entitled, provided they have regard to the standard investment criteria of suitability and diversification under section 4 and take proper investment advice under section 5. The Trustee Act 2000 also empowers trustees to acquire land (section 8), delegate investment management to agents (Part IV), and receive remuneration for professional services (section 29).

The Trusts of Land and Appointment of Trustees Act 1996 (TOLATA 1996) abolished the doctrine of the trust for sale and replaced it with the ‘trust of land’, which now governs all trusts of real property in England and Wales. TOLATA 1996 confers on trustees of land the powers of an absolute owner (section 6), requires consultation with adult beneficiaries before exercising functions relating to the land (section 11), and gives beneficiaries the right to apply to the court for an order relating to the exercise of those functions (sections 14 and 15).

The Perpetuities and Accumulations Act 2009 applies to trusts created on or after 6 April 2010 and sets a maximum perpetuity period of 125 years, within which the trust must terminate and assets must vest absolutely in the beneficiaries. The Act also removed the restrictions on the accumulation of trust income that previously applied under the Law of Property Act 1925.

A Trust Deed created under English law must be executed as a deed, complying with the formalities set out in section 1 of the Law of Property (Miscellaneous Provisions) Act 1989. For trusts of land, the declaration must also be in writing signed by the person who is able to declare the trust, in accordance with section 53(1)(b) of the Law of Property Act 1925.

Our UK Trust Deed template covers the four main types of express trust: bare trusts, fixed interest trusts, discretionary trusts, and life interest trusts. It incorporates the statutory references required by the Trustee Act 2000, TOLATA 1996, and the Perpetuities and Accumulations Act 2009, and includes provisions for trustee powers, beneficiary entitlements, trust period, IHT acknowledgment, and proper execution formalities.

A Trust Deed is needed in the following principal circumstances in England and Wales.

When a parent or grandparent wishes to make provision for children or grandchildren over the long term by placing assets — cash, investments, or property — into a formal trust structure that ensures the assets are professionally managed and distributed in accordance with the Settlor’s wishes, rather than passing to the beneficiaries outright at a young age.

When a property owner wishes to declare the beneficial ownership of a property that is registered in one name but beneficially owned in different proportions — for example, where an unmarried couple have purchased a property together in one partner’s name, and they wish to document their respective beneficial shares. A declaration of trust executed under section 53(1)(b) of the Law of Property Act 1925 creates the written evidence required to prove a beneficial interest in the property.

When a family wishes to manage wealth across generations using a discretionary trust, giving the trustee flexibility to respond to changes in the beneficiaries’ circumstances and to take advantage of income tax planning opportunities by distributing income to beneficiaries with lower marginal tax rates.

When a testator wishes to set up a trust under their Will to hold assets for minor beneficiaries until they reach a specified age (such as 25), or to provide a life interest to a surviving spouse while preserving the capital for children from a previous relationship.

When a business owner wishes to establish a trust to hold shares in a family company as part of a business succession plan, potentially qualifying for Business Property Relief from IHT under sections 103–114 of the Inheritance Tax Act 1984 if the qualifying conditions are met.

When assets are to be transferred to trustees to be held for the benefit of a vulnerable person, a disabled person, or a person who is incapable of managing their own affairs, where a statutory trust or other arrangement does not provide sufficient flexibility.

Note: The creation of a trust has significant legal, tax, and practical consequences. The Settlor should obtain specialist legal and tax advice from a qualified solicitor and a tax adviser before executing any Trust Deed.

Parties and Trust Identity — Identify the Settlor (the creator of the trust) and the Trustee(s) by their full legal names and addresses. Name the trust clearly (typically the Settlor’s surname followed by ‘Family Trust’ or ‘Living Trust’). State the type of trust (bare, fixed, discretionary, or life interest) and the commencement date.

Constitution and Trust Fund — Describe the Initial Trust Fund with sufficient specificity: cash amounts, property by title number, shares by company and number. For a trust of land, the transfer of legal title requires compliance with section 52 of the Law of Property Act 1925 (conveyance by deed) and registration at HM Land Registry. The trust is constituted only when the assets are transferred to the trustee or, where the Settlor acts as trustee, when the declaration is made with sufficient certainty of all three certainties.

Beneficiaries — Identify beneficiaries with the level of certainty required by law. For a fixed trust, state each beneficiary’s full name, date of birth, relationship to the Settlor, and defined share. For a discretionary trust, define the class of potential beneficiaries with sufficient precision to satisfy the test in McPhail v Doulton [1971] AC 424 (can it be said with certainty that any given person is or is not a member of the class?). Include a gift-over in case a beneficiary dies before the vesting date.

Income and Capital Provisions — Set out how trust income is to be dealt with (accumulated, paid to a life tenant, or distributed at the trustee’s discretion) and how and when capital is to be distributed. Include the extended powers of maintenance and advancement under sections 31 and 32 of the Trustee Act 1925, as amended by the Trusts (Capital and Income) Act 2013.

Trust Period — Specify the trust period, which must not exceed 125 years from the date of the deed for trusts created on or after 6 April 2010 (Perpetuities and Accumulations Act 2009). Include a vesting date within the trust period on which the trust must terminate and assets must vest absolutely.

Trustee Powers — Incorporate the statutory powers under the Trustee Act 2000 and TOLATA 1996. Consider extending investment powers beyond the general power of investment in section 3 of the Trustee Act 2000. Specify whether the trustee is entitled to remuneration under section 29 of the Trustee Act 2000.

Successor Trustee — Appoint a named successor trustee to take office if the initial trustee dies, resigns, or becomes incapacitated. Confirm the mechanism for future trustee appointments in accordance with section 36 of the Trustee Act 1925.

Revocability and Amendment — State whether the trust is irrevocable or whether the Settlor reserves a power to revoke. An irrevocable trust achieves the IHT objective of removing assets from the Settlor’s estate. Any amendment must be by deed executed with the same formalities as the original deed.

Execution Formalities — The trust deed must be executed as a deed under section 1 of the Law of Property (Miscellaneous Provisions) Act 1989: signed by the Settlor in the presence of an independent witness who attests the signature. The witness must not be a beneficiary, nor the spouse or civil partner of a beneficiary.