To set up a trust for a child, you choose the type of trust, appoint trustees you trust to manage it, decide what goes into it, and record it in a written trust deed or in your will. Most trusts then need to be registered with HMRC's Trust Registration Service, usually within 90 days of being created (gov.uk, register a trust, as at August 2026, subject to change).
A trust lets someone hold money, property or investments for a child until they are old enough, or ready, to receive them. This guide sets out the common types of trust for a child in England and Wales, what each is used for, the tax and registration duties, and the practical steps. Figures are current as at August 2026 and are subject to change. It is general information, not advice for a particular family.
What is a trust for a child?
A trust is a legal arrangement where one or more people, the trustees, hold assets for the benefit of someone else, the beneficiary. For a child, that usually means a parent, grandparent or other relative putting assets aside and appointing trustees to look after them until an agreed point. The person who sets up the trust is the settlor, and the terms are recorded in a trust deed or, where the trust starts on death, in a will. Trusts are one of several tools in wider estate planning, alongside a will and a lasting power of attorney.
People use a trust for a child for reasons that a straightforward gift cannot cover: to hold assets until the child is older than 18, to set conditions on how money is used, to provide for a child who cannot manage money themselves, or to keep an inheritance separate from a child's own divorce or debts. A trust does not guarantee any of these outcomes, and the right structure depends on the family, so this is an area where many people take advice before acting.
Types of trust for a child
Three structures cover most situations. The main difference is when, and how, the child becomes entitled to the assets.
| Type of trust | When the child is entitled | Often used for |
|---|---|---|
| Bare trust | The child has an absolute right to the capital and income at age 18 (16 in Scotland) | Simple gifts, a grandparent saving for one grandchild |
| Discretionary trust | Only when the trustees decide; no fixed entitlement | Flexibility across several children, or a vulnerable beneficiary |
| 18-to-25 trust (by will) | Between 18 and 25, as the will sets out | A parent leaving assets to their own children by will |
Source: gov.uk, types of trust, as at August 2026, subject to change. A bare trust cannot hold assets back beyond 18 in England and Wales, so families who want a later age, or ongoing control, tend to look at a discretionary or will-based trust.
How to set up a trust for a child
The practical steps are broadly the same whether the trust starts in your lifetime or on death.
- Decide the purpose. Whether the aim is to hold assets to a certain age, to keep flexibility, or to provide for a child with particular needs.
- Choose the type of trust that fits that purpose, using the table above as a starting point.
- Appoint trustees. Usually two or more people, or a professional trustee, who will manage the assets.
- Decide what goes in. Cash, investments, a life policy, or property, and how much.
- Record the terms in writing. A lifetime trust is set out in a trust deed; a trust that starts on death is written into your will. See how to write a will for how a will-based trust fits in.
- Register the trust. Most UK express trusts must be registered with HMRC's Trust Registration Service, usually within 90 days of being created (gov.uk, as at August 2026, subject to change).
Choosing trustees
Trustees are responsible for looking after the assets and acting in the child's interests, so the choice matters as much as the trust itself. Many families appoint two or more trustees, often a mix of a trusted relative and a professional, so that decisions are shared and cover continues if one trustee dies or steps down. Trustees have legal duties, including keeping accounts and dealing with tax, and a professional trustee will usually charge for the work. It can help to name people who are likely to outlive the period of the trust and who understand the family's wishes.
Tax and registration
Trusts have their own tax treatment, and the figures below apply to the trustees rather than to the child directly. This is general information, and a trust's actual position depends on its income, its assets and who set it up.
| Tax | Position for most trusts (2026/27) |
|---|---|
| Income tax, tax-free amount | Normally £500 (reduced to £100 each if the settlor has 5 or more such trusts) |
| Income tax rate above that (accumulation or discretionary trusts) | 45%, or 39.35% on dividend income |
| Capital gains tax, annual exempt amount for trustees | £1,500 (half the £3,000 for an individual) |
| Income from a parent's gift to their own minor child | If it is more than £100 a year, it is taxed as the parent's income |
Sources: gov.uk, trusts and Income Tax; gov.uk, trusts and Capital Gains Tax; gov.uk, parental trusts for children. All figures as at August 2026 and subject to change.
Inheritance tax can also apply. Putting assets into a lifetime trust can be a chargeable transfer, and some trusts face charges on each ten-year anniversary and when assets leave the trust. The standard inheritance tax rate is 40%, charged on the part of an estate above the available thresholds, with the nil-rate band at £325,000 (gov.uk, inheritance tax, as at August 2026, subject to change). How a trust interacts with your own inheritance tax position is one of the main reasons this is worth planning carefully rather than doing from a template.
- A bare trust gives the child an absolute right to the assets at 18 in England and Wales, 16 in Scotland (gov.uk).
- Trustees' capital gains tax annual exempt amount is £1,500, half the £3,000 for individuals (gov.uk).
- Trust income above the tax-free amount of £500 is taxed at up to 45% for accumulation or discretionary trusts (gov.uk).
- Most trusts must register with HMRC within about 90 days of being set up (gov.uk).
A trust in your will or during your lifetime
A trust for a child can start in one of two ways. A lifetime trust begins when you sign a trust deed and put assets in, which can be useful for gifts to grandchildren or for a policy written in trust. A will-based trust begins only on death, and is common for parents who want their own children to inherit at a set age rather than automatically at 18. Each route has different tax and timing effects, and the same family sometimes uses both. Trusts also come up when families are thinking about later-life costs and planning for, limiting or mitigating the impact of care fees, though the rules there are strict and outcomes are not assured.
Scotland and Northern Ireland
This guide describes the law of England and Wales. The clearest difference for a trust for a child is age: in Scotland a child is generally entitled to the assets of a bare trust at 16 rather than 18 (gov.uk, as at August 2026, subject to change). Scotland has its own trust and succession law, and Northern Ireland has a separate but broadly similar system to England and Wales. Where a trust touches more than one jurisdiction, it can be worth taking advice in each.
Frequently asked questions
What is the best type of trust to set up for a child?
There is no single best type, because it depends on what the trust is for. A bare trust is simple but gives the child an absolute right at 18 in England and Wales (gov.uk, as at August 2026, subject to change). A discretionary trust offers more flexibility and control, and a will-based 18-to-25 trust suits parents who want a later age. Many families discuss the options with a qualified adviser before choosing.
How much does it cost to set up a trust for a child?
Costs vary widely with the type of trust and who prepares it, and there are also ongoing costs such as trustee time and tax returns. A single fixed figure is rarely meaningful without knowing what is involved, so it can help to ask for clear, agreed fees in writing and to check what is and is not included before proceeding. Our team can talk through what a particular arrangement would involve.
At what age does a child get money from a trust?
It depends on the trust. With a bare trust, the child has the right to the capital and income at 18 in England and Wales, or 16 in Scotland (gov.uk, as at August 2026, subject to change). A discretionary trust has no fixed age, because the trustees decide, and a will can set an age such as 21 or 25 through an 18-to-25 trust.
Do I have to register a trust for a child with HMRC?
In most cases, yes. Most UK express trusts must be registered with HMRC's Trust Registration Service, generally within 90 days of the trust being created, whether or not it has to pay tax (gov.uk, register a trust, as at August 2026, subject to change). Some trusts are excluded, so it is worth checking the current guidance for the specific arrangement.
Is income from a trust for a child taxed on the parent?
It can be. If a parent gives assets to their own unmarried minor child and the income from that gift is more than £100 in a tax year, the income is treated as the parent's and taxed on them (gov.uk, parental trusts for children, as at August 2026, subject to change). Gifts from grandparents and other relatives are not caught by this particular rule.
Can I set up a trust for a child in my will?
Yes. A trust can be written into a will so that it starts on death, which is common for parents who want their children to inherit at a set age rather than at 18. This is often part of wider will planning, and you can read more in our guide on how to write a will. Because the wording has to be precise, many people have a will-based trust drafted rather than using a template.