Trust 10-Year Anniversary Charge

Trust 10-Year Anniversary and Exit Charges Explained

The trust 10 year anniversary charge is a periodic inheritance tax charge on relevant property trusts, set at a maximum of 6% of the value above the tax-free threshold. Source: gov.uk, as at July 2026, subject to change.

8 min read · Written by the Fairchild Oldfield team · Last reviewed: July 2026

What is the trust 10 year anniversary charge?

It is a periodic inheritance tax charge on the value held in a relevant property trust. Inheritance tax is charged at each 10-year anniversary of the date the trust was set up, on the net value of any relevant property in the trust on the day before that anniversary. The rate can reach a maximum of 6% of the value above the available threshold (gov.uk, trusts and inheritance tax, as at July 2026, subject to change).

Which trusts face the charge?

The charge applies to trusts holding what the rules call relevant property, which covers most discretionary trusts and many other trusts set up in a settlor's lifetime. Assets such as money, shares, land and buildings held in these trusts are generally relevant property, so they can be caught by both the anniversary charge and the exit charge (gov.uk, trusts and inheritance tax, as at July 2026, subject to change). Some trusts, such as certain bare trusts and some trusts for disabled or bereaved young people, are treated differently.

Trust type	Relevant property regime?
Discretionary trust	Generally yes
Most lifetime trusts holding assets for a class of beneficiaries	Often yes
Bare trust (assets held for a named person absolutely)	Generally no
Some trusts for disabled or bereaved young people	Treated differently

Trust type

Relevant property regime?

Discretionary trust

Generally yes

Most lifetime trusts holding assets for a class of beneficiaries

Often yes

Bare trust (assets held for a named person absolutely)

Generally no

Some trusts for disabled or bereaved young people

Treated differently

Source: gov.uk, trusts and inheritance tax, as at July 2026, subject to change. See our guide to discretionary trusts for how these arrangements work in practice.

How the 10-year charge is calculated

The calculation compares the trust's relevant property against the nil-rate band. A charge arises on every 10-year anniversary where the trust holds relevant property valued above the inheritance tax threshold, which is £325,000 per person (gov.uk, as at July 2026, subject to change). Value within the available threshold is not charged, and only the excess is brought into the calculation, which is why the effective rate is often well below the 6% ceiling.

The maximum rate is 6% of the chargeable value, but the actual rate depends on the trust's value, the nil-rate band available to it, and earlier gifts or transfers the settlor made, so many trusts end up paying a lower effective percentage (gov.uk, as at July 2026, subject to change). The figures can be involved, so trustees often ask a qualified professional to run the numbers.

What is a trust exit charge?

An exit charge, also called a proportionate charge, can arise when relevant property leaves a trust, for example when assets are paid out to a beneficiary or the trust ends. Inheritance tax is charged up to a maximum of 6% on assets such as money, land or buildings transferred out of a trust (gov.uk, trusts and inheritance tax, as at July 2026, subject to change). The amount reflects how long the assets have been in the trust, so an exit soon after an anniversary usually carries a smaller charge.

Timing matters. There is generally no exit charge where an asset is transferred out of the trust within 3 months of setting up the trust, or within 3 months following a 10-year anniversary (gov.uk, as at July 2026, subject to change). Because the sums depend on dates and values, trustees often take advice before making a distribution.

A worked example (illustration only). Suppose a discretionary trust holds relevant property worth £400,000 at its first 10-year anniversary, with a full nil-rate band available. Only the value above the £325,000 threshold is brought into the charge, so roughly £75,000 sits within the charging calculation, and the rate applied to it can reach a maximum of 6% (gov.uk, as at July 2026, subject to change). Applying the 6% ceiling to £75,000 would give around £4,500, though the effective rate is often lower once the full calculation is run. Change the value, the trust's history or the settlor's earlier gifts and the result changes, so this is general information rather than a calculation for any real trust.

Reporting and paying the charge

Trustees are responsible for reporting and paying these charges. Where a chargeable event such as a 10-year anniversary or an exit occurs, trustees must pay any inheritance tax due by the end of the sixth month after the event (gov.uk, trusts and inheritance tax, as at July 2026, subject to change). Many trusts also need to be kept up to date on the Trust Registration Service (gov.uk, register a trust as a trustee, as at July 2026, subject to change).

Anniversary charge. Reviewed on each 10-year anniversary of the trust's start date. Source: gov.uk, as at July 2026, subject to change.

Exit charge. Considered whenever relevant property leaves the trust, subject to the 3-month windows. Source: gov.uk, as at July 2026, subject to change.

Deadline. Any tax is generally due by the end of the sixth month after the chargeable event. Source: gov.uk, as at July 2026, subject to change.

Trust charges in Scotland and Northern Ireland

Inheritance tax is a UK-wide tax, so the relevant property regime, the £325,000 threshold and the 6% maximum rate apply to trusts across Scotland, England, Wales and Northern Ireland alike (gov.uk, as at July 2026, subject to change). What can differ is the surrounding trust and succession law. Scotland has its own rules on trusts and on rights that pass to a spouse and children, so where a trust or its assets touch more than one UK nation, it can be worth taking advice in each. For the wider context, see our estate planning guide.

Frequently asked questions

How much is the 10 year anniversary charge on a trust?

It is charged at a maximum of 6% of the value of relevant property above the tax-free threshold, and the actual rate is often lower once the calculation is run (gov.uk, as at July 2026, subject to change). The threshold is £325,000. The result depends on the trust's value and history, so many trustees ask a qualified professional to check the figures.

Which trusts pay the 10-year charge?

Trusts holding relevant property, which generally includes most discretionary trusts and many lifetime trusts, can be caught by the anniversary charge (gov.uk, as at July 2026, subject to change). Some trusts, such as certain bare trusts and some trusts for disabled or bereaved young people, are treated differently, so the trust type matters and can be worth confirming with an adviser.

When does a trust exit charge apply?

An exit charge can arise when relevant property leaves a trust, up to a maximum of 6% (gov.uk, as at July 2026, subject to change). There is generally no charge where assets leave within 3 months of setting up the trust or within 3 months after a 10-year anniversary (gov.uk, as at July 2026, subject to change). Timing and value both affect the outcome.

When must the charge be reported and paid?

Where a 10-year anniversary or an exit gives rise to a charge, trustees must generally pay any inheritance tax due by the end of the sixth month after the event (gov.uk, as at July 2026, subject to change). Many trusts also need to be registered and kept up to date on the Trust Registration Service (gov.uk, as at July 2026, subject to change).

Does a trust worth under £325,000 pay the charge?

Often not. A 10-year charge generally arises where the trust holds relevant property valued above the £325,000 threshold, with only the excess brought into the calculation, so a trust within that band may have no charge to pay (gov.uk, as at July 2026, subject to change). Earlier gifts by the settlor can affect this, so it can be worth checking the detail.

Is the 6% rate fixed for every trust?

No. The 6% figure is a maximum, not a flat rate. The effective rate depends on the trust's value against the available nil-rate band and the settlor's earlier chargeable transfers, so many trusts pay a lower percentage (gov.uk, as at July 2026, subject to change). Because the calculation can be involved, trustees frequently ask a solicitor, a STEP practitioner or an accountant to work it through.

About Fairchild Oldfield

The Fairchild Oldfield team brings together estate planning, tax, independent financial advice and client care, working with families across England and Wales.

Fairchild Oldfield are estate planning specialists and will writers, not a firm of solicitors. This article is general information based on practical experience, not legal, tax or financial advice.

Important: This article is general information only and is not legal, tax or financial advice. Reading it does not create a professional relationship. It is based on the law of England and Wales, and other UK jurisdictions may differ. Figures and rules are current as at July 2026 and are subject to change. Before acting, many people choose to seek advice from a suitably qualified professional, such as a solicitor, a STEP practitioner, an accountant, or an FCA-authorised financial adviser, who can consider your individual circumstances.