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.


Tenant paying rent to a non-resident Landlord directly – no agent involved

Gross rent can only be paid to the landlord after written confirmation is received from HMRC by the tenant.


Landlord will contact HMRC (Non-resident telephone helpline) and give details of tenant. Then HMRC will write a letter to the tenant authorising them to pay gross rent without deduction. Till then rent can only be paid after deduction of tax at basic rate (currently 20%).

Sample letter below:

Sample NRLS Approval Letter