Bare trusts are regularly encountered in estate planning, particularly where property is held for minor children, who lack sufficient legal capacity to hold the property concerned. Typically, they will be used where an interest in land or shares are held for a minor.

Sometimes, the arrangements are very simple and, in other cases, a trust instrument sets out additional powers available to the trustees. In such cases, the wording can sometimes have a look and feel of a complex, formal trust arrangement, and it is useful to explore the legal position in outline before considering how the inheritance tax (IHT) and capital gains tax (CGT) rules apply.