A private trust company lets a family be its own trustee

The private trust company puts the family in the trustee's chair

Most families with a trust do not think about who the trustee is until it becomes a problem. The trustee is an institution, a bank or a professional trust company, that holds the assets and makes the decisions, and for many families that is exactly right. A private trust company is what a family reaches for when it is not. Instead of appointing an outside professional as trustee, the family incorporates a company to be the trustee of its own trusts, and then sits on the board of that company. The trustee is no longer a third party the family instructs and hopes will agree. The trustee is the family, acting through a company it owns and controls.

That is the appeal, and it is also the whole of the risk. A private trust company hands the family the thing a professional trustee withholds, which is control over trustee decisions. Control is genuinely valuable for governance, continuity and confidentiality, and for a large or complex fortune it is often the right structure. But control is also the single thing the United Kingdom taxes, because a trust is resident for UK tax where its trustee is managed, and a company controlled by a UK-resident family is managed where that family sits. The private trust company that was built to keep wealth in an offshore trust can, through nothing more than the location of its board, make that trust UK-resident. This article sets out what a PTC is, why families use one, how it escapes the licensing that a commercial trustee needs, and why the control it delivers is the point at which a UK-connected family has to be most careful.

What a private trust company actually is

A private trust company is a company whose only function is to act as trustee of a specific family's trusts. It is not a holding company and it does not own the family's assets. The assets are owned by the trusts, in the ordinary way, and the PTC is the trustee that holds legal title and takes the trustee's decisions for those trusts. Where a normal structure has a professional trustee sitting above the trust, a PTC structure replaces that professional with a company the family has incorporated for the purpose, so the box marked "trustee" is filled by an entity the family owns rather than by an institution it hires.

The distinction from the surrounding structures matters, because a PTC is frequently confused with them. It is not the trust: the trust is the legal relationship that holds the wealth, and the PTC is the trustee of it. It is not a foundation: a foundation is a self-owning entity that holds assets directly, whereas a PTC holds nothing and merely acts as trustee. And it is not a family office: a family office manages the wealth day to day, while the PTC occupies the trustee's legal role above it. In a fully built structure a family might have all of them: a family office that manages, trusts that hold, a PTC that acts as trustee of those trusts, and a foundation holding other assets alongside. The PTC's specific job is the trusteeship, and its specific value is who gets to exercise it.

Why families use one

The reason a family incorporates its own trustee rather than hiring one comes down to control, and control expresses itself in several practical ways. The first is decision-making. On a professional trustee's board, the family is a beneficiary who asks and a trustee who decides; on a PTC board, the family and its trusted advisers are the directors who decide, within the terms of the trust. For a family with an operating business, illiquid assets, or an investment approach a professional trustee would find uncomfortable, having the decision sit with people who understand the assets is the difference between a trust that works and one that fights its own trustee.

The other reasons follow from the same root. Continuity: a PTC does not resign, retire, or get acquired by another institution, so the trusteeship stays stable across generations rather than moving between providers, each of which must be brought up to speed. Confidentiality: the family's affairs sit inside a company the family controls rather than inside an institution's wider client base.

Cost, at scale: for a large fortune with many trusts, a single PTC acting for all of them can be cheaper than professional trustee fees charged on each. And governance: the PTC board is a natural forum for involving the next generation in real decisions before they inherit them. None of these is a tax reason, and that is the point to hold onto, because the tax consequences of the control run the other way.

A family-only private trust company is not a licensed trust business

Acting as a trustee by way of business is a regulated financial activity, which is why a professional trust company must be licensed. A private trust company avoids that licensing not by evading it but by falling outside it: because the PTC acts only for its own family's trusts and does not offer trust services to the public, it is not carrying on a trust business in the regulated sense. The centres that host PTCs build this exemption into their rules, and it is the feature that makes a PTC practical rather than a licensed-trustee project in miniature.

The DIFC is the clearest corridor example. Its rules define a private trust company as a body corporate whose purpose is solely to provide trust services for specific trusts of which a family member or a family entity is the settlor, and a PTC operating within a single family office structure, which does not solicit or provide trust services outside that family, sits outside the licensing regime that applies to commercial trustees. That treatment was reinforced by the DIFC's 2023 reforms to its family arrangements framework, the same reforms that reshaped the single family office regime. The established offshore centres, Guernsey, Jersey and the Cayman Islands among them, apply the same connected-persons logic: a PTC acting as trustee for a family or other connected persons is relieved from the licensing a public trustee needs, typically on the condition that a licensed administrator provides its administration and takes on the regulated relationship. The exemption is real, but it is conditional, and the condition is almost always that the PTC is not left to run itself.

The control the UK taxes

The corridor consequence of a PTC is decided by one rule, and it is the rule families most often miss: a trust is resident, for UK tax, where its trustees are resident (section 69 TCGA 1992 and the income-tax equivalent), and a corporate trustee is resident where it is centrally managed and controlled. A private trust company is a corporate trustee. If its board is made up of UK-resident family members and advisers who take the trustee decisions in the United Kingdom, the PTC is centrally managed and controlled in the UK, the PTC is UK-resident, and the trust of which it is trustee is UK-resident too, taxable in the UK on its worldwide income and gains. The offshore trust exists on paper; the trustee that runs it sits in London; and the tax follows the trustee, not the paper.

This is the same trap that catches a UK-run family office and a UK-run offshore company, and it catches a PTC more easily than either, because the whole purpose of a PTC is to put the family in control of the trustee. The mechanics are set out for the corporate case in the analysis of why a Dubai company can still be UK tax resident, and the trustee case runs on the same central-management-and-control test.

A family that wants the governance benefits of a PTC and a non-UK-resident trust has to locate the control genuinely outside the UK: a majority of non-UK-resident directors who actually take the decisions where they sit, real meetings held outside the UK, and a UK-resident family that influences without controlling. That is a demanding posture to hold, and a family that cannot hold it has not built an offshore trust. It has built a UK one with an offshore address.

A private trust company does not reduce tax or hide assets

Even where the PTC is genuinely non-UK resident, it changes nothing about the UK anti-avoidance rules that reach a UK-connected settlor or beneficiary. If the settlor or the settlor's spouse can benefit from the trust, the settlements code (section 624 ITTOIA 2005) taxes the trust's income on the settlor as it arises, whoever the trustee is. Gains realised by a non-resident trust with a UK-resident settlor who retains an interest are attributed to that settlor under the settlor gains charge in section 86 TCGA 1992.

The transfer of assets abroad rules (section 720 ITA 2007) reach a UK resident who has power to enjoy income of a foreign structure. None of these turns on whether the trustee is a professional or a private trust company; they turn on the settlor's and beneficiaries' UK position, and the analysis is the same as for any offshore trust, set out in the offshore trust and settlor analysis and the protected settlements analysis.

The confidentiality point is subject to the same reality. A PTC keeps the family's affairs out of an institution's client base, but it does not keep them from HMRC. The trust is reportable, the automatic-exchange regimes report the accounts behind it, and the register of trusts captures it. A PTC that is sold to a family as a way to reduce UK tax or to keep assets invisible has been mis-sold, and the mis-selling is the kind of arrangement that produces an enquiry rather than avoids one. The honest description is narrower and more useful: a PTC is a governance and control tool that, used by a family that has genuinely left the UK or that accepts the UK treatment of its structure, does a real job, and used by a family that has not, concentrates exposure rather than removing it.

A private trust company, a foundation, or a professional trustee

The PTC is one of three ways to fill the trustee or ownership role, and the choice between them is really a choice about how much control the family keeps and what that control costs in tax terms. The table sets them side by side on the axes that decide it.

The pattern the table shows is that control and clean UK treatment pull against each other. A professional trustee gives the least control and the least residence risk. A private trust company gives the most control and, for a UK-connected family, the most residence risk. A foundation sits between them and is often the better answer for a family that wants continuity and confidentiality without the control problem, because a foundation is designed to be an orphan that no one controls, which is precisely what keeps it out of the UK net. The comparison between a foundation, a family investment company and a trust for a UK-connected family is set out in its own decision analysis, and a PTC is the option that maximises family control at the top of a trust while accepting the tax exposure that control brings.

Where the private trust company fits in the corridor

For a corridor family the PTC is a layer, not a plan, and it has to be sequenced with the rest of the structure and with the family's residence. Where the family has genuinely relocated to the UAE and runs its affairs from there, a DIFC private trust company acting for the family's trusts, within the family office structure, is a coherent and well-supported arrangement, and it sits naturally alongside the family office establishment decision and the foundation as the holding layer. The PTC provides the trusteeship, the foundation or the trusts provide the ownership, and the family office provides the management, each doing one job.

Where the family has not relocated, or has one foot in each jurisdiction, the PTC is the layer that most easily goes wrong, because it is the layer where control concentrates. A UK-resident principal who insists on controlling the trustee has made the same error at the trustee level that a principal makes by running a Dubai family office from London, examined in the family office control analysis. The corridor discipline is the same throughout: the wealth can be placed offshore with a signature, and the control can only be placed offshore by genuinely moving the people who exercise it. A PTC rewards a family that has done that and punishes one that has not.

Frequently asked questions

What is a private trust company?

A private trust company, or PTC, is a company created to act as the trustee of one or more trusts settled by a single family, instead of appointing an outside professional trustee. It does not own the family's wealth. The trusts it acts for own the assets, and the PTC is the trustee that holds legal title and makes the trustee decisions, with the family and its advisers sitting on the PTC's board. It exists to put the family, rather than an institution, in the trustee's role.

Why would a family set up a private trust company?

For control, continuity and confidentiality. A PTC lets the family and its trusted advisers make trustee decisions themselves, within the terms of the trust, which matters most where the trust holds an operating business or complex assets a professional trustee would resist. It does not resign or get acquired, so the trusteeship is stable across generations, and it keeps the family's affairs inside a company the family controls. For a large fortune with several trusts, one PTC can also cost less than professional trustee fees on each. None of these is a tax reason.

Does a private trust company need a licence?

Not in the way a professional trustee does, provided it acts only for its own family. Acting as a trustee by way of business for the public is a regulated activity that requires a licence, but a PTC that serves only its own family's trusts and does not offer services to outsiders falls outside that regime. In the DIFC a single family office PTC operates outside the licensing regime on that basis, and offshore centres such as Guernsey, Jersey and the Cayman Islands apply the same connected-persons logic, usually on condition that a licensed administrator handles its administration.

Where can you set up a private trust company?

The established homes are the offshore trust centres, Guernsey, Jersey and the Cayman Islands among them, and in the corridor the DIFC, whose common-law framework and single family office regime accommodate a PTC acting for a family's trusts. The right location depends on where the family and its trusts are based, where the assets and counterparties sit, and which centre's administration suits the family. Wherever it is set up, the location of the PTC's incorporation matters far less than the location from which it is actually controlled.

Is a private trust company taxed in the UK?

It can be, and this is the central risk. A trust is UK-resident for tax where its trustees are resident, and a corporate trustee is resident where it is centrally managed and controlled. A PTC whose board is controlled from the United Kingdom is UK-resident, and the trust it acts for is UK-resident with it, taxable in the UK on worldwide income and gains. For the trust to be non-UK-resident, the PTC's control has to sit genuinely outside the UK, with decision-making directors who are non-UK-resident and who actually take the decisions where they are.

What is the difference between a private trust company and a foundation?

A PTC is a corporate trustee: it acts as trustee of a trust that holds the family's assets, and the family controls the PTC. A foundation is a self-owning entity that holds the assets directly and is designed to be controlled by no one, governed by its charter and council. The practical difference for a UK-connected family is control and residence risk: the PTC keeps control with the family and therefore carries a high UK-residence risk if run from the UK, while the foundation is built as an orphan and is generally cleaner for UK purposes. A family that wants continuity without the control problem often chooses the foundation.

Does a private trust company protect assets or reduce tax?

No, not by itself. A PTC is a governance tool, not a shield. Where a UK-resident settlor can benefit, the settlements code taxes the trust's income on the settlor; where a UK-resident settlor retains an interest, the settlor gains charge attributes the trust's gains to them; and the transfer of assets abroad rules reach a UK resident with power to enjoy the income of a foreign structure. The trust is also reported to HMRC and captured by the automatic-exchange regimes. A PTC sold as a way to cut UK tax or hide assets has been mis-sold and invites the enquiry it was meant to avoid.

Who runs a private trust company?

Its board. The board typically combines family members, who bring the knowledge of the assets and the family's intentions, with independent professional directors, who bring trustee experience and, critically for a UK-connected family, non-UK residence where the trust needs to be non-UK-resident. A licensed administrator usually sits behind the PTC, providing the day-to-day administration and the regulated relationship that the exemption from licensing depends on. The composition of that board is not a formality; it is what decides where the PTC, and therefore the trust, is resident.

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Critical advisory. A private trust company is a genuine and powerful structure for a family that wants to hold the trusteeship of its own trusts, and it is also the layer at which a UK-connected family most easily converts an offshore plan into an onshore tax charge. The value it delivers, control over trustee decisions, is the precise thing that determines where the trust is resident and whether the UK anti-avoidance rules bite, so the decision to use one cannot be separated from the family's residence, the composition of the board, and the honest question of who will actually take the decisions and where. A PTC is not a way to reduce UK tax or to keep assets from HMRC, and used as though it were, it produces the exposure it was meant to avoid. Whether a PTC, a foundation or a professional trustee is right, and how it sits alongside the family's office and holding structures across the UAE, the United Kingdom and Ireland, turns on the specific facts of the family and its assets. We advise families and their offices on exactly that decision and act as the corporate service provider that establishes and administers the structure. This article is general information and not legal or tax advice, and your own position should be confirmed against your specific facts before you act.