Using a registered trust to open a bank account for your business: there are a number of reasons to open a bank account through a bare trust on behalf of your limited company, and it can provide a number of tax advantages. If you want to explore the possibilities, then Coddan Formations Agency can offer you expert advice on ways to use a bare trust, or possession trust as it is sometimes known, and other structures to protect your money and minimise your liabilities.
In essence a bare trust is a trust where trustees passively hold assets on behalf of a beneficiary. It's a simple trust that is often used to put shares or assets into trust for a child, and is a common vehicle for minimising inheritance tax liability.
There are other uses for a bare trust starts-up, however, and you can use this basic structure designed to protect assets to manage a bank account for your private company. As the beneficiary of the trust is solely responsible for the income tax and capital gains, you can use it to effectively shift and defer income to those that enjoy preferential taxation.
There is also the potential to move shares and income out of the country and pay tax in a more favourable regime with a bare trust arrangement, as the beneficiary can reside outside of the United Kingdom. With this in mind, if the shares are held under the beneficiary's name and the bank account is opened in the name of the bare trust, then the settlor will obviously minimise their income tax and capital gains liabilities. If you wish to pursue this structure, it pays to have a bank account in the name of the bare trust to help you move money efficiently.