ATED: Bare Trust: NRLS


A client owned a property in London via off-shore company.

On the first glance it seems it falls under ATED but as per HMRC ATED technical guidance, Page 4 : example 2. Quoted below:

Example two: B Ltd is acting as a bare trustee for Mr Y and it holds the legal title to a dwelling worth £15 million. The beneficial interest in the dwelling is held by Mr Y personally. Despite B Ltd owning the legal title to the dwelling it does not own the beneficial interest. B Ltd does not therefore meet the ownership condition and is under no obligation to (and should not) send in returns

Client came under this scenario thus was not covered by ATED.


  1. a) ATED Technical guidance

2. It is well settled under English law that a trust does not need to be in writing and may be made orally. Source : Lily Tang Vs HMRC 2019 UKFTT 81 but in the case of land , the trust needs to be evidenced in writing under S53(1)(b) Law of Property Act 1925.


Same client planned to let this property out on rent. There was confusion as to which form to complete, we called HMRC and they advised that as the legal owner is the company we should complete form NRL2.

We made an application but HMRC sent us a letter back asking us to complete NRL 3 for trusts as there is a bare trust involved.

We conclude that HMRC second advice asking us to complete NRL3 is correct as a trust is involved bare or any other type.

Thank you HMRC for all the guidance.

HMRC is in our opinion is one of the best tax collecting institutions in the world.