In the tax year ending 2022, the number of taxpaying trusts reduced by 3% year-on-year, and was down 12% since the tax year ending 2017.

In total 141,500 trusts and estates filed self assessment returns in the tax year ending 2022, down from 161,000 trusts last year. More starkly, the total number has shrunk by 35% since 2005 when there were 220,500.

The latest HMRC figures show that total income held in trusts hit £3.07bn, moving above pre-pandemic highs where income was £3.05bn in 2020. Capital gains tax payable increased by 27% to £1.05bn in the tax year ending 2022.

Will Leonard, director in the private wealth and estates team at Saffery said: ‘The downward trend is due to the continued effects from the Finance Act 2006 changes to the IHT regime for trusts making them less popular.