A trust is only as reliable as the people who look after it. Trustee services in Ireland exist for the situations where the right trustee isn’t obvious, isn’t available, or isn’t independent enough to hold the role well. This guide covers how a trust works, what trustees are responsible for, the obligations that come with the role, and when appointing a professional trustee is the considered choice.
How a Trust Works
A trust is a legal arrangement in which one person, the settlor, transfers assets to one or more trustees, who hold and manage those assets for the benefit of others, the beneficiaries. The terms are usually set out in a trust deed, or in a will where the trust is created on death.
The trustees become the legal owners of the trust assets, but they cannot treat them as their own. Everything they do with the trust’s property must be for the beneficiaries and within the terms of the trust.
Common Types of Trust
| Type | How it works |
|---|---|
| Bare trust | The beneficiary has an absolute right to the assets; the trustee simply holds them on their behalf |
| Fixed interest trust | Each beneficiary’s entitlement, such as a right to income, is set out in the trust terms |
| Discretionary trust | The trustees decide which beneficiaries receive income or capital, and when, within the terms of the trust |
| Will trust | Created by a will and taking effect on death, often to hold assets for children or other dependants |
Discretionary trusts carry the most responsibility for trustees, because decisions that would otherwise be fixed by the trust deed are left to the trustees’ judgement.
What a Trustee Is Responsible For
Trustees owe fiduciary duties to the beneficiaries. In practice, that means:
- Following the trust deed: acting only within the powers and terms the trust sets out
- Acting in the beneficiaries’ interests: not their own, and not the settlor’s once the trust is established
- Acting impartially: treating beneficiaries fairly where their interests differ
- Keeping trust property separate: never mixing trust assets with personal or business assets
- Managing the assets with care: including how the trust’s funds are held and invested
- Keeping proper records: of assets, income, decisions and any distributions made
- Avoiding conflicts of interest: and not benefiting personally from the role unless the trust allows it
Trustees can be personally liable for a breach of trust, which is why the role deserves careful thought before anyone accepts it.
Registration and Tax Obligations
Holding a trust brings ongoing compliance obligations alongside the duties above.
Beneficial ownership: trustees of most express trusts must hold up-to-date information on the trust’s beneficial owners and register the trust on the Central Register of Beneficial Ownership of Trusts, maintained by Revenue, keeping the entry current as circumstances change. This is the trust equivalent of the RBO register for companies.
Tax: a trust is not a company, so it does not pay corporation tax. Instead, the trustees are generally chargeable to income tax on the trust’s income and to capital gains tax when trust assets are sold, reported on an annual return to Revenue, and without the personal allowances and exemptions an individual would have.
- Discretionary trusts must be notified to Revenue on Form DT1 within a set period of being established. They can be subject to Discretionary Trust Tax, and to an additional surcharge on income that is accumulated rather than distributed within the permitted period.
- Benefits passed to beneficiaries may fall within Capital Acquisitions Tax, with the beneficiary generally responsible for the return.
- Bare trusts are usually treated as transparent: the beneficiary is taxed directly on the income and gains, rather than the trustees.
Check Revenue’s guidance for the current rules and rates, and take tax advice specific to the trust.
Residence: where the trustees are resident can affect how the trust itself is treated for tax purposes, so the choice of trustee is a structural decision, not only a practical one.
When a Professional Trustee Makes Sense
Many trusts are run by family members or close friends of the settlor. A professional trustee is often the better choice where:
- Independence matters: family dynamics or competing beneficiaries call for an impartial decision-maker
- Continuity matters: the trust is intended to last for many years, beyond any one individual’s availability
- No suitable trustee is available: or those closest to the settlor are themselves beneficiaries
- The settlor or beneficiaries are outside Ireland: and a trustee with an Irish presence is needed
- Compliance discipline matters: registration, record-keeping and reporting need to be handled consistently
Trustee Services From RizFin
Acting as a trustee of a trust, or arranging for another person to act as one, is a regulated activity in Ireland. RizFin provides trustee services under its authorisation as a Trust or Company Service Provider, and may either act as trustee directly or arrange for a suitable, vetted person to do so.
Alongside the appointment itself, we support trusts through each stage: registration with Revenue and on the beneficial ownership register, ongoing administration and records, annual accounts and tax returns, and, when the time comes, winding the trust up. Each is set out under the Trust tab of our services.
Every trustee appointment is subject to individual assessment, due diligence and formal acceptance before it begins. The trust deed itself, and legal advice on how a trust should be structured, remain with the settlor’s solicitor.
To discuss a trustee appointment or support for an existing trust, get in touch.