Understanding Bare Trusts: Nominees Ltd Holds House on Trust for Beneficiary X

SDLT and Bare Trusts: Who Is Treated as the Buyer

Where land is held by a bare trustee or nominee, SDLT usually treats the beneficiary as the buyer rather than the person named on the Land Registry title. This means the beneficiary is normally the person who must consider the tax position, pay any SDLT due, and file the SDLT return, provided the arrangement is genuinely a bare trust.

• A bare trustee holds legal title only and must act on the beneficiary’s instructions, with no real independent powers.
• For SDLT, the key issue is beneficial ownership, not just whose name appears at the Land Registry.
• If the beneficiary is entitled to the income, controls what happens to the property, and enjoys the economic benefit, they are usually treated as acquiring the property.
• The beneficiary is generally liable for SDLT and responsible for submitting the land transaction return to HMRC.
• Calling an arrangement a nominee or bare trust is not enough on its own; the actual facts and powers involved must support that treatment.

Scroll down for the full analysis.

SDLT and bare trusts: when the beneficiary is treated as the buyer

This page explains how Stamp Duty Land Tax applies where land is held by a bare trustee or nominee. The key point is simple: if a trustee is only holding the legal title for someone else, and that other person is the real beneficial owner, SDLT generally treats the acquisition as made by the beneficiary, not by the trustee.

What this rule is about

Land can be owned in two different senses. One person may hold the legal title shown at the Land Registry, while another has the beneficial ownership and the real economic interest in the property.

A bare trust, sometimes called a nominee arrangement, is a very limited form of trust. The trustee holds the property for the beneficiary, but has no real independent powers over it. The beneficiary is entitled to the income and to the property itself, and the trustee acts only on the beneficiary’s instructions.

For SDLT, this matters because tax is charged by reference to who is treated as acquiring the property. The person on the title is not always the person treated as the buyer for tax purposes.

What the official source says

The source gives an example of a company, Nominees Ltd, holding a house on trust for X. X is entitled to the rents, so the rental income belongs to X. X is also entitled to decide what happens to the house. Nominees Ltd cannot do anything with the property unless X tells it to do so. Although the Land Registry shows Nominees Ltd as the registered owner, it is only holding the title.

The official position stated in the source is that if a bare trustee or nominee acquires property on behalf of the beneficiary, the acquisition is treated as made by the beneficiary. The beneficiary is therefore the person liable for SDLT and the person responsible for filing the land transaction return with HMRC.

What this means in practice

The practical effect is that SDLT follows the beneficial ownership in a bare trust situation, not just the legal title.

So if a nominee company or individual is used to hold a property purely as bare trustee, that does not usually shift the SDLT position onto the nominee. Instead, the beneficiary is treated as the purchaser for SDLT purposes.

This has several practical consequences:

• the beneficiary is the person whose tax position must be analysed
• the beneficiary is the person who is liable to pay the SDLT
• the beneficiary is the person responsible for the SDLT return
• the fact that the trustee appears on the Land Registry title does not by itself determine who the buyer is for SDLT

This is important where a nominee structure is used for administrative, privacy, financing, or management reasons. A nominee arrangement does not usually change the underlying SDLT result if the nominee is truly only a bare trustee.

How to analyse it

To work out whether this treatment applies, the real question is whether the arrangement is genuinely a bare trust or nominee arrangement.

Useful questions include:

• Who is entitled to the rents or other income from the property?
• Who is entitled to the benefit of the property itself?
• Who decides whether the property is sold, let, or otherwise dealt with?
• Does the trustee have any real discretion, or must it simply follow instructions?
• Is the trustee doing anything more than holding legal title?

The features highlighted in the source point strongly towards a bare trust:

• the beneficiary receives the income
• the beneficiary can do whatever they wish with the property
• the trustee cannot act independently
• the trustee holds title only as nominee

If those features are present, the beneficiary is likely to be the person treated as acquiring the property for SDLT.

If they are not present, the arrangement may not be a bare trust, and a different SDLT analysis may be needed.

Example

A company is used to buy a flat because the investor wants the company to appear on the Land Registry title. But under the trust arrangement, the investor is entitled to all rental income, can require the flat to be sold at any time, and the company cannot make any decision about the flat on its own. In that situation, the official source indicates that the acquisition is treated as made by the investor as beneficiary, not by the company as bare trustee. The investor would be the person liable for SDLT and responsible for the return.

Why this can be difficult in practice

The difficult part is often not the legal rule itself, but deciding whether the facts really amount to a bare trust.

In straightforward nominee arrangements, the answer may be clear. But in practice, documents and conduct do not always match. A person may be called a nominee or bare trustee, yet still have powers or responsibilities that go beyond simply holding title. If the trustee has genuine discretion, or if the beneficial interests are not fixed in the way described in the source, the arrangement may not fall within this simple treatment.

Another practical difficulty is that people sometimes assume the registered proprietor is automatically the SDLT taxpayer. The source shows that this is not necessarily correct. SDLT looks beyond the Land Registry entry where a bare trust exists.

The source is also focused on the basic position for bare trustees and nominees. It does not set out every possible variation of trust structure, so care is needed before applying the example to more complex trust arrangements.

Key takeaways

• Where a bare trustee or nominee acquires land for a beneficiary, SDLT generally treats the beneficiary as the buyer.
• The beneficiary, not the bare trustee, is liable for SDLT and responsible for filing the SDLT return.
• The Land Registry title is not conclusive if the person on title is only holding the property as a bare trustee.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Understanding Bare Trusts: Nominees Ltd Holds House on Trust for Beneficiary X

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