Bare trusts and stamp duty: who pays when a nominee buys?
Bare trusts and SDLT
A nominee may hold the title, but the person with full rights over the property is usually treated as the buyer for SDLT.
- Check who controls the property.
- Read the trust documents.
- Do not rely on the Land Registry name alone.
Scroll down for the full analysis.
Read the original guidance here:
Bare trusts and stamp duty: who pays when a nominee buys?
Stamp duty normally treats you as the buyer. Land Registry title alone changes nothing.
What this rule is about
A bare trust is a simple arrangement. One person holds the property while another has the full right to it.
Title alone does not decide SDLT. It is who really has the right to control the property.
What the official source says
HMRC’s manual exemplifies X’s company-held let house. X receives the rent and can decide what happens to the house. The company can only act on X’s instructions.
Where a bare trustee or nominee buys property for a beneficiary, and the beneficiary is fully entitled and directs the trustee, HMRC says SDLT treats that beneficiary as making the purchase. The legislation supports this for bare trustees.
- The beneficiary must be fully entitled to the property against the trustee.
- The beneficiary alone must have the right to direct how the property is dealt with.
- The trustee may keep limited rights to recover taxes, costs or similar outgoings.
- A person holding property as a nominee can be a bare trustee.
What this means in practice
For SDLT, the beneficiary matters rather than the nominee. Consequently, the beneficiary’s other property interests and circumstances may matter instead of those of the nominee company.
The Land Registry record remains important evidence. It does not settle the SDLT answer by itself.
- Record the real buyer correctly in the SDLT analysis.
- Check whether the transaction is one that needs a land transaction return.
- Do not assume a company on the title must itself pay the tax.
How to analyse it
Begin with the trust documents. Then compare them with real-life operation. Labels such as “nominee” help, but they are not enough on their own.
- Who paid for, or agreed to buy, the property?
- Who receives the rent or other income from it?
- Who can order a sale, mortgage or other change?
- Can the trustee act without the beneficiary’s instructions?
- Does anyone else have rights that limit the beneficiary’s control?
Example
For X, Nominees Ltd buys a house and takes title. X receives all rent from the let house and can tell Nominees Ltd to sell it, keep it or deal with it in another way. Nominees Ltd cannot make those choices itself. On those facts, this is the type of bare-trust arrangement described by HMRC, so X is treated as the buyer for SDLT.
Why this can be difficult in practice
What initially appears to be a simple arrangement may, once the documents are read, reveal another person’s right or a trustee’s broader decision-making power, meaning that it is not a bare trust. That can change the result.
This is the part people get wrong: being named on the title is not the same as owning the full benefit of the property.
- Rental income is useful evidence, but it is not the whole test.
- A trust with several beneficiaries may need closer review.
- Special rules apply where a bare trustee receives a new lease, so this explanation does not address that case.
Key takeaways
- A nominee’s name on the title does not decide the SDLT result.
- In a bare trust, SDLT generally looks through the nominee to the beneficiary.
- Check the trust terms and actual control before completing the SDLT return.
Technical analysis
For advisers, and for anyone who wants to check the law behind this page. You do not need this section to understand the guidance above.
Legislation
- FA 2003 Schedule 16 para 1 — what makes a trust a bare trust
- FA 2003 Schedule 16 para 3 — how stamp duty applies to bare trustees
- FA 2003 section 76 — when a buyer must file a land return
- FA 2003 section 77 — which land transactions need a return
Official guidance
The pages below are HMRC’s guidance. Guidance is not law. It sets out how HMRC reads the legislation, and it is not binding on you, on a tribunal or on a court. Where guidance and the legislation differ, the legislation wins. HMRC can also change or withdraw guidance, and it may not cover your facts.
Where this is not settled
- The trust deed and the real rights of each person must be checked to decide whether the arrangement is a bare trust.
- The supplied statutory text is current only to 17 November 2025. Current primary legislation should be checked for a transaction after that date.
Evidence you would need
This kind of case is decided on the facts of the individual property. These are the records that usually settle it, and the ones an adviser would ask you for.
- The trust deed, declaration of trust or nominee agreement
- The purchase contract and transfer documents
- Evidence of who can direct a sale, mortgage or other dealing
- Evidence of who receives rent and bears property costs
- The Land Registry title and the transaction date
Explore this with an AI
Readers often want to test their own situation. Copy the prompt below into ChatGPT, Claude or Gemini. It hands the model the actual legislation for this page rather than letting it answer from memory, and tells it to be explicit about what is uncertain. What comes back is information, not advice – check it against the links above.
I am researching UK Stamp Duty Land Tax (SDLT), which applies in England and Northern Ireland. MY QUESTION Bare trusts and stamp duty: who pays when a nominee buys? [Replace this with your own situation: what you are buying, the price, the dates, who the buyer is, and what you plan to do with the property.] THE LAW THIS TURNS ON - FA 2003 Schedule 16 para 1 - what makes a trust a bare trust https://www.legislation.gov.uk/ukpga/2003/14/schedule/16/paragraph/1/2025-11-17 - FA 2003 Schedule 16 para 3 - how stamp duty applies to bare trustees https://www.legislation.gov.uk/ukpga/2003/14/schedule/16/paragraph/3/2025-11-17 - FA 2003 section 76 - when a buyer must file a land return https://www.legislation.gov.uk/ukpga/2003/14/section/76/2025-11-17 - FA 2003 section 77 - which land transactions need a return https://www.legislation.gov.uk/ukpga/2003/14/section/77/2025-11-17 Guidance page from HMRC on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm31710a HOW I WANT YOU TO ANSWER 1. Work from the legislation above. Read it before answering. Guidance from HMRC is its view of the law, not the law, and does not bind a tribunal or a court. 2. Tell me what the rule actually requires, in plain English. 3. Tell me which facts decide the answer, and which facts would change it. 4. Tell me what evidence I would need to support the position. 5. Be explicit about anything unsettled or fact-sensitive. Do not guess. 6. Your training data has a cutoff and SDLT rates and reliefs change at fiscal events. Say so if you are not sure the law is current. POINTS ALREADY KNOWN TO BE UNCERTAIN ON THIS TOPIC - The trust deed and the real rights of each person must be checked to decide whether the arrangement is a bare trust. - The supplied statutory text is current only to 17 November 2025. Current primary legislation should be checked for a transaction after that date. Do not give me a conclusion you cannot support from the provisions above.
Legislation links show Finance Act 2003 as it stood on 2025-11-17. The law may have changed since, and the rules that apply are those in force on the date of your transaction. The official guidance this page is based on is here.
This page was last updated on 1 September 2026
Useful article? You may find it helpful to read the original guidance here: Bare trusts and stamp duty: who pays when a nominee buys?
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