Declaration of Trust for Shares

Our Declaration of Trust for Shares template:

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How Does It Work?

  • 1. Download
  • 2. Edit
  • 3. Print
  • 4. Sign

Our Declaration of Trust for Shares template is for use where a nominee holds shares in trust for someone else. Either could be an individual or a company. The Declaration of Trust is short and to the point, making it easy for you to use and quick to complete.

Whenever someone is holding shares on behalf of someone else, so that there is no doubt between them, such a declaration of trust should always be put in place. This can also be used as proof of the trust where needed, e.g. if someone queries the situation, perhaps to claim that the nominee is actually the outright owner (i.e. both legal and beneficial owner).

It is best if you put the declaration of trust in place immediately that the shares become subject to a trust. If you  did not do that, then you  should sign it as soon as possible afterwards.

When you have the declaration of trust in place, there is then no real need for the beneficial owner to ask the nominee to transfer the shares to him (although it gives him to the power to require this at any point).

Using our Declaration of Trust for Shares template

Once you have purchased the template, you can download it and the short guide that accompanies it from your account with us as Word documents. The guide explains each clause and makes filling in the template easy for you.

David drafted the declaration of trust. He is one of our founders and a very experienced UK solicitor.

When you buy our template, as with all our templates, you will benefit from:

  • permanent access to the template from your account;
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  • our free email and telephone helplines to assist you with queries you may have with your account or with using the template; and
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Guide to our Declaration of Trust for Shares

What follows is an excerpt from our guide to this template. The full guide accompanies the template when you purchase it.

The declaration itself is not registered anywhere, e.g. it is not sent to the company that has issued the shares (as the company is only duty-bound to recognise the owner of the legal title and not who owns the beneficial title) or to HM Customs & Revenue for registration. You might need to send a copy of it to HM Customs & Revenue at a later stage if ever the tax implications were queried, e.g. when it comes to selling the shares. At that point, if you have a declaration signed when the trust was first set up, then it is good proof that this is a genuine situation and not a sham that you made up at a later date.

For Wikipedia’s take on what trusts are all about, see: https://en.wikipedia.org/wiki/English_trust_law.

Clauses in this Declaration of Trust for Shares

1. Interpretation

This clause defines the main terms used in the declaration.

  • Company – fill in the details to identify the company that issued the shares in question – name and registered number.
  • Shares – fill in the details – the number of shares, the class (e.g. “ordinary”), their “par” value (this is the nominal value of the shares, not their current or market value – it is the denomination they were issued in, which is most commonly as £1.00 shares) and state whether fully paid or part paid, etc.

2. Declaration of trust

This is the main clause, which states that the nominee holds the shares in trust for the beneficial owner.

3. Undertaking

Clause 3.1 provides that the nominee will account to the beneficial owner for any dividends received on the shares. Also the nominee will only vote in accordance with the way the beneficial owner directs him to. If the beneficial owner asks for the shares to be transferred, sold, etc, then the nominee will obey. Clause 3.2 provides that, if required, the nominee will sign a stock transfer form for the transfer of the shares. This could act as security for the obligation in clause 3.1 for the nominee to transfer them on request. The form would be left undated and with the name of the transferee and the price blank. Then the beneficial owner could complete it later and use it to sell the shares.

4. Power of attorney

This gives a power of attorney in favour of the beneficial owner. This protects the beneficial owner in case the nominee does not follow his directions. It acts as further security.

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