Multiple trusts - same day additions, related settlements and Rysaffe planning

Last updated 9 February 2026

Key points

Trusts created on the same day will be treated as related settlements for periodic charges
Anti-avoidance legislation exists to limit the benefits of multiple small trusts (pilot trusts) receiving same day additions
Making a series of gifts on separate dates could limit periodic charges (Rysaffe arrangements)

Creating multiple trusts

Splitting a large gift across a number of different trusts will mean each trust has its own nil rate band for calculating periodic charges. However, the benefit is limited as the value of the gifts into each trust can affect the periodic charges on the other trusts.

Related settlements occur where two or more trusts are set up on the same day by the same settlor. The rules exist to limit any tax advantage by creating multiple trusts.

When calculating periodic charges the initial value of all the other trust(s) created on the same day will be added to the value of the trust being assessed at each tenth anniversary. The shorthand method of multiplying the excess above the available nil rate band by 6% cannot be used where there are related settlements or same day additions.

Example - William created four discretionary trusts on the same day (1 June 2015) and pays £100,000 into each of them. There was a CLT of £400,000 and IHT of £15,000 (£75,000 x 20%) was paid.

At the 10th anniversary each trust is valued at £150,000. There have been no exits or additions to the trusts.

Periodic charge

Value of trust #1	£150,000
Value of related settlements (3 x £100,000)	£300,000
Total	£450,000
Less nil rate band at 10 year anniversary	(£325,000)
Chargeable amount	£125,000
Notional tax @ 20%	£25,000
Effective rate (£25,000/£450,000 x 100)	5.55%
Actual rate (5.55% x 30%)	1.67%
Periodic charge (£150,000 x 1.67%)	£2,500

This calculation is repeated for each of the four trusts giving a total periodic charge of £10,000.

Had the total amount been added to a single trust the periodic charge would be:

Trust value	£600,000
Nil rate band	(£325,000)
Chargeable amount	£275,000
Periodic charge (£275,000 x 6%)	£16,500

Same day additions

Similar rules exist where new property is added to two or more existing trusts on the same day. The initial value of all property added on the same day to any trusts created by the same settlor is aggregated with the current trust value when calculating periodic charges.

Rules were introduced 10 December 2014 to prevent the use of pilot trusts to limit the impact of trust IHT charges.

This involved the creation of multiple small trusts, often with just a £10 note. At a later date a much larger amount was added to each of the trusts. This was often a lump sum paid from the settlor’s will or lump sum pension death benefits.

Each trust has its own nil rate band for periodic charge calculations. But only the initial value of any related settlements (number of pilot trusts x £10 starter gift) was included when calculating future IHT charges and not the property which was subsequently added to those settlements.

The new same day additions rules limit the effectiveness of this type of planning. Where the added property is spread across multiple trusts the value added to each trust is included in the periodic charge calculation.

Rysaffe arrangements

If trusts are created on separate days, it avoids them being related settlements. This is often referred to as Rysaffe planning following a tax case which involved a series of gifts on consecutive days.

Each trust will have its own nil rate band. However, each time a trust is created there will be a chargeable transfer which reduces the available nil rate for each trust which follows it.

Example - William created four discretionary trusts over four days (1 - 4 June 2015) and pays £100,000 into each of them.

Trust #1 is a CLT of £100,000 – no tax as within the available nil rate band (£325,000)
Trust #2 is a CLT of £100,000 – no tax as within the available nil rate band (£225,000)
Trust #3 is a CLT of £100,000 – no tax as within the available nil rate band (£125,000)
Trust #4 is a CLT of £100,000 – £15,000 IHT payable on excess above the available nil rate band (£25,000)

At the 10th anniversary each trust is valued at £150,000. There have been no exits or additions to the trusts.

Periodic charges on each trust

Value of trust #1	£150,000
Less available nil rate band at 10 year anniversary	(£325,000)
No periodic charge as within the nil rate band

Value of trust #2	£150,000
Less available nil rate band at 10 year anniversary	(£225,000)
No periodic charge as within the nil rate band

Value of trust #3	£150,000
Less available nil rate band at 10 year anniversary	(£125,000)
Chargeable amount	£25,000
Periodic charge (£25,000 x 6%)	£1,500

Value of trust #4	£150,000
Less available nil rate band at 10 year anniversary	(£25,000)
Chargeable amount	£125,000
Periodic charge (£125,000 x 6%)	£7,500

Total periodic charges across all four trusts	£9,000

Compared to the periodic charge of £16,500 William would have paid if a £400,000 investment was paid into a single settlement, significant savings have been made.

Loan trusts

This type of planning can also be effective when used with loan trusts. There is no chargeable transfer with loan trusts which will reduce the nil rate band of each subsequent trust. This is because money is lent to the trustees rather than gifted. If the settlor has not made any other CLTs, each loan trust would have a full nil rate band for calculation of periodic charges.