Bare Trusts, Nominees and Family Trusts: How SDLT Treats Them in 2026

A standard purchase of a £400,000 second home in England attracts £30,000 of Stamp Duty Land Tax (SDLT) — £10,000 of standard duty plus a 5% additional-property surcharge of £20,000 on the full price (HMRC, Stamp Duty Land Tax: residential property rates). Whether that surcharge applies often turns on a single, surprisingly technical question: who does HMRC treat as the chargeable person on the transaction?

That question matters because SDLT is assessed on the beneficial owner, not necessarily the person whose name appears on the Land Registry title. Bare trusts, nominee arrangements and family trusts all sit on the line between those two — and the wrong assumption can cost a five-figure surcharge or, in the opposite direction, lose a first-time buyer their nil-rate relief.

This is a factual walkthrough of the HMRC SDLT manual position as published at the date of writing. It is not advice. Speak to a qualified conveyancer or tax adviser before acting — the rules are technical and the wrong election on an SDLT return is hard to unwind.

The starting point: who is the "chargeable person"?

SDLT is charged on the buyer of a chargeable interest in land (s42 Finance Act 2003). Where the legal owner holds the property on trust, Schedule 16 FA 2003 governs which person — trustee, beneficiary, or both — HMRC treats as the buyer for the purposes of the charge.

The general rule, paraphrased: where there is a bare trust, the trust is transparent for SDLT. The beneficial owner is the chargeable person, not the bare trustee. Where there is a settlement (anything other than a bare trust — typically an interest-in-possession trust or discretionary trust), the trustees are treated as the buyers and their characteristics — not the beneficiary's — drive the rate (HMRC Stamp Duty Land Tax Manual, SDLTM31700).

That sounds simple. The complications start when (a) the beneficiary is a child, (b) the additional-property surcharge in Schedule 4ZA FA 2003 is in play, or (c) the beneficiary is a first-time buyer and relief is being claimed.

Bare trusts: the transparent case

A bare trust exists where the trustee holds the legal title for one or more beneficiaries who are absolutely entitled, of full age and capacity, and the trustee has no discretion. In that case the trustee is essentially a name-holder; the beneficial owner can call for the property at any time.

For SDLT, this means:

• The beneficial owner is the chargeable person. They file the SDLT return and pay the duty.
• The beneficial owner's personal status drives the rate — first-time buyer relief, the additional-property surcharge, and the non-UK resident surcharge are all tested against the beneficiary, not the trustee.
• A first-time buyer adult child whose parent holds bare legal title can, in principle, still claim FTB relief on a purchase up to £500,000 — provided the child is absolutely entitled and the bare trust is genuine, not a sham.

Nominee arrangements work the same way. A nominee company or individual holding legal title for a single beneficial owner is transparent for SDLT; the beneficial owner is the chargeable person.

What HMRC will not accept is a paper bare trust dropped in at completion purely to switch the chargeable person and dodge SDLT. The Ramsay principle (developed by the courts and applied in cases including Project Blue Ltd v HMRC [2018] UKSC 30) and the targeted anti-avoidance provisions in s75A FA 2003 give HMRC the tools to look through artificial trust arrangements where the substance is a direct purchase.

The minor-child exception: SDLTM09814

For the additional-property surcharge specifically, there is an important carve-out where the beneficiary is a child under 18.

Under Schedule 4ZA paragraph 12 FA 2003, where a parent or step-parent holds property on bare trust for their minor child, the parent is treated as the purchaser for the purposes of the 5% higher rate on additional dwellings — even though the child is the beneficial owner. HMRC's Stamp Duty Land Tax Manual spells this out at SDLTM09814.

The practical result: if a parent already owns a main residence and buys a second home on bare trust for their minor child, the surcharge applies to that purchase as if the parent had bought it personally. The bare trust does not provide an additional-property workaround.

Two narrower points worth flagging:

1. The minor-child rule only operates for the surcharge. Standard SDLT bands still apply on the basis that the child is the beneficial owner — the parent is not pulled in for first-time buyer testing in the other direction (although a minor cannot in practice claim FTB relief, since the relief requires the buyer to intend to occupy as their only or main residence).
2. The deeming under para 12 falls away once the child reaches 18. From that point the bare trust is a normal bare trust and the (now adult) beneficiary is the chargeable person for all SDLT purposes.

Settlements: trustees as the chargeable person

A settlement — anything that is not a bare trust — is a different regime. The trustees are the chargeable persons; the rate and any surcharge are tested against the trust, not the underlying beneficiaries.

There are two practical consequences:

• A purchase by trustees of a discretionary or interest-in-possession trust is generally charged at the standard residential rates. First-time buyer relief under Schedule 6ZA is not available, because the relief requires the buyer to be an individual intending to occupy as their only or main residence.
• The 5% additional-property surcharge under Schedule 4ZA applies if the trust holds any other dwelling at the date of completion (subject to the £40,000 de minimis), regardless of whether the underlying beneficiaries personally own other homes.

Schedule 4ZA paragraph 11 contains a narrow carve-out for what the manual calls the "settled property" treatment: where a beneficiary has an interest in possession in a single dwelling held under a settlement, that dwelling can be treated as the beneficiary's dwelling for the purpose of testing whether another purchase by the beneficiary attracts the surcharge — but the converse does not apply automatically.

This is one of the more frequently misapplied parts of the SDLT rules. The default position is that settlements do not enjoy the same transparency as bare trusts.

Declarations of trust at completion

A common arrangement is for one named buyer to take legal title at completion and simultaneously execute a declaration of trust splitting the beneficial ownership between two or more people. Provided the declaration is genuine and contemporaneous, HMRC will accept that the beneficial owners are the chargeable persons (SDLTM31700).

That means:

• If both beneficial owners are first-time buyers, FTB relief can in principle be claimed.
• If one beneficial owner already owns another dwelling, the additional-property surcharge applies to the whole transaction. This is the joint-buyer trap covered in detail in the joint-buyer stamp duty trap explainer.
• Spouses and civil partners are aggregated under Schedule 4ZA paragraph 9 regardless of declaration: if either spouse owns another dwelling, the surcharge applies — even on a purchase by one spouse alone. Separation has its own treatment, walked through in the married-couples separation SDLT piece.

Declarations of trust executed after completion in an attempt to retrospectively re-allocate beneficial ownership for SDLT are unlikely to change the chargeable-person analysis. HMRC's position is that the SDLT charge crystallises on the effective date of the transaction.

Worked examples (England, 2026 rates)

Calculated against HMRC residential bands (nil-rate to £125,000, 2% to £250,000, 5% to £925,000), first-time buyer relief under Schedule 6ZA FA 2003 (nil to £300,000, 5% to £500,000 with a cliff above), and Schedule 4ZA 5% surcharge on the full price for additional dwellings over £40,000. Standard-band figures verified against the Homecost stamp duty calculator on 2026-05-25.

What the rules do not change

A few things are independent of how the trust is structured:

• The 14-day filing deadline runs from the effective date of the transaction. SDLT must be filed and paid within 14 days, whether the buyer is an individual, trustee, nominee or beneficial owner (s76 FA 2003).
• The 3-year window for higher-rate refund claims under Sch 4ZA para 8 — where an old main residence is sold within three years of the new purchase — is also unaffected by the trust analysis. The mechanics are covered in the additional-property surcharge refund piece.
• The Land Registry application still goes in the name of the legal owner, not the beneficial owner. Beneficial interests are reflected in the underlying declaration of trust held off-register or noted via a Form A restriction.
• CGT, IHT and income tax all have their own trust treatments that are not aligned with the SDLT analysis. A bare trust transparent for SDLT is also transparent for CGT and income tax, but the IHT position depends on the relationship — gifts to minors typically engage the parental-settlement rules in s660B ITTOIA 2005.

Practical points for buyers considering trust arrangements

This article describes the published rules. It does not recommend a structure. A few generic points:

• Get the trust analysis right before completion, not after. The SDLT return is filed on the effective date of the transaction; a retrospective change to trust documents will not usually change the chargeable person.
• Spousal aggregation under Sch 4ZA para 9 is mechanical. A bare trust into one spouse's name does not separate them from the other spouse's existing dwellings.
• A declaration of trust altering beneficial ownership can itself be a chargeable event in some circumstances (s53 FA 2003 land transactions definition). Whether that triggers a separate SDLT charge depends on whether consideration moves between the beneficiaries.
• HMRC compliance checks on trust-based SDLT positions are not uncommon. Document the substance of the trust contemporaneously and retain evidence of the source of funds. The Schedule 36 information-notice power lets HMRC compel third-party records, including bank statements and conveyancer files.

Compare the cost of competing structures yourself with the Homecost stamp duty calculator, which handles all four UK regimes (SDLT, LBTT, LTT and Northern Ireland) and applies the additional-property surcharge, first-time buyer relief and non-resident surcharge in combination. For the wider regime differences, the SDLT vs LBTT vs LTT cross-regime comparison walks the same purchase across all four nations. Browse the full Cost Intelligence collection for the rest of the SDLT cluster, or look up the all-in monthly cost on any street with the postcode tool.

Based on the published HMRC SDLT manual references (SDLTM09814, SDLTM31700) and Schedule 4ZA and Schedule 16 of the Finance Act 2003 as current at 2026-05-25.

This is general information about how published HMRC rules operate. It is not tax, legal or conveyancing advice. Speak to a qualified adviser before acting — trust structures interact with CGT, IHT and FCA-regulated mortgage matters in ways that depend on individual circumstances.