Bridging Loans for Trusts
Bridging loans for trusts are short-term property finance arranged in the UK where the borrower is a trust. The trustees borrow on behalf of the trust and are named as the borrowers on the property charge. Trust bridging covers property acquisition, renovation or refinance. The structure is unregulated, but accessing it requires that the trust deed permits borrowing and that the trustees' authority to borrow is clearly documented and legally certified.
FD Commercial arranges bridging loans for trustees from £250,000 across England, Scotland and Wales. Your trust must be established under UK law or be registered with HMRC, and the trust deed must expressly permit trustees to borrow and charge trust assets.
Rates and LTV are indicative and vary by lender, trust type, loan amount, security type and exit strategy. Speak to us for figures specific to your trust structure and transaction.
Why do trusts use bridging loans in the UK?
Trusts borrow through bridging in several contexts. Estate trusts arising from probate may need to acquire or refinance property whilst the estate is still being administered and assets remain illiquid. Family trusts holding investment property may need bridging to acquire an additional property ahead of a planned refinance or sale. Discretionary trusts managing property for multiple beneficiaries may use bridging for acquisition or renovation to maximise the property's income yield.
The advantage of bridging for trusts is certainty and speed. Unlike residential mortgages, bridging does not require proof of income or rental yield. Unlike development finance, bridging does not require a detailed exit strategy or comparable sales evidence. The security (the property) is what matters. The trade-off is higher cost and a smaller lender pool willing to consider trust structures.
What does a trust deed need to say for a bridging loan to be approved?
Before doing anything else, review your trust deed. It must explicitly permit trustees to borrow money and to charge trust assets as security. If the deed is silent on borrowing, or if it restricts borrowing to certain trustees or certain purposes, most lenders will decline the application. Some deeds grant borrowing power only at the direction of a named settlor or beneficiary. Others limit borrowing to a specified amount.
If your trust deed is restrictive on borrowing, you have limited options: seek formal variation of the trust deed through the courts (expensive and time-consuming), obtain written consent from a settlor or named beneficiary if the deed requires it (requires finding and gaining agreement from that person), or find a different lender with more relaxed criteria (most specialist lenders have standardised requirements and will not diverge).
According to the Bridging & Development Lenders Association (BDLA), UK bridging lending exceeded 7.1 billion pounds in 2024. Trust-structured borrowing represents an estimated 8-10% of the bridging market, concentrated among specialist lenders.
According to HMRC guidance on the Trust Registration Service, over 500,000 trusts were registered on the TRS as of 2024, with most UK trusts now required to register. Lenders treat TRS registration as a compliance signal and may decline applications from unregistered trusts where registration was required.
Does HMRC Trust Registration affect a trust's ability to get a bridging loan?
Most UK trusts created from 3 June 2022 onwards must register with HMRC on the Trust Registration Service (TRS). Historic trusts had until 1 September 2022 to register. Trusts exempt from registration include some bare trusts, trusts with taxable income below 100 pounds per annum, and a small number of other categories.
Lenders will ask whether your trust is registered or exempt from registration. If it is required to be registered but is not, most specialist lenders will decline. Before approaching lenders, confirm your trust's TRS status. Registration is free and can be completed online. Have your TRS reference number ready when submitting bridging applications.
What are the rates and costs for a trust bridging loan in the UK?
Interest rates for trust bridging typically range from 0.70% to 1.3% per month. Trust borrowers typically pay 0.05% to 0.2% more per month than equivalent UK-resident individuals, reflecting the additional legal complexity and reduced lender appetite for trust structures. Arrangement fees, valuation costs and legal fees follow a similar pattern to standard bridging, but legal costs are typically higher due to the need for trust deed review and legal opinion on trustee authority.
| Cost component | Typical range | Notes |
|---|---|---|
| Interest rate (per month) | 0.70%-1.3% | Trust borrowers pay higher rates than individuals |
| Arrangement fee | 1%-2% of gross loan | Payable on day one or rolled into facility |
| Valuation fee | 0.3%-0.5% of property value | Typically 1,000-3,000 pounds for residential |
| Legal fees (trust deed review + opinion) | 2,000-4,000 pounds | Higher than standard bridging due to trust complexity |
| Lender's solicitor fees | 800-1,500 pounds | Raised by lender on offer |
| HMRC TRS registration (if required) | Free | If not already registered |
On a £600,000 bridging loan at 0.85% per month for 12 months, interest cost would be approximately £61,200. Adding arrangement fee (1.5%, £9,000), legal fees for trust review and opinion (£3,000), valuation (£1,500) and lender fees (£1,000), total finance costs reach roughly £75,700, or 12.6% of the loan amount. This assumes rolled-up interest. Serviced or retained interest structures may reduce overall cost. Always obtain a full quotation before committing to terms.
How long does a trust bridging loan take to arrange?
Arranging bridging as trustees typically takes longer than for individual borrowers. Timeline is typically 8 to 12 weeks from submission to exchange of contracts, compared to 6-8 weeks for individuals. The additional time reflects the need for lender review of the trust deed, legal opinion on trustee authority, HMRC TRS confirmation, and more extensive AML documentation covering trustees and beneficial owners. Having all documentation ready from the outset is critical to shortening timeline.
Worked example
Trust bridging for property acquisition, Manchester. Discretionary family trust.
The trustees of a family discretionary trust required 400,000 pounds to acquire a residential investment property ahead of a planned distribution of assets from the trust. The property was to be let to tenants. The trust had been established in 2015 and was registered on HMRC TRS. The trust deed explicitly permitted borrowing. FD Commercial placed the case with a specialist lender at 0.80% per month for 18 months. Legal review of the trust deed and preparation of a legal opinion on trustee authority took 8 business days. AML clearance on the three trustees took a further 6 business days. Exchange occurred 35 days after initial submission. The property was let within two months of completion and refinanced onto a buy-to-let mortgage at month 8, releasing the bridging facility early. Total interest paid: approximately 27,200 pounds (8 months on the outstanding balance).
Which types of trust can get a bridging loan in the UK?
UK discretionary trusts are most commonly accepted by lenders. Bare trusts (where the trustees hold legal title but the beneficiary has all beneficial interest) are also widely accepted. More complex structures, such as trusts with non-resident trustees or offshore trusts, face a much narrower lender pool. Some lenders restrict applications to trusts where all trustees are UK-resident individuals. Before instructing lawyers, confirm with a specialist broker that your trust structure is acceptable to the lender you are targeting.
Can a trust use bridging finance in a probate or estate situation?
Trust bridging often arises in probate contexts. When a property is held in an estate and the estate is still being administered, the executors may need bridging to acquire or refinance property on behalf of the estate pending the distribution of assets. The estate is treated as a trust in this context, and the executors borrow as trustees. This is a recognised use case, and most specialist lenders are familiar with probate bridging applications. However, timelines can be extended if there are estate administration complexities or disputes among beneficiaries.
What exit strategies work for a trust-owned property bridging loan?
The clearest exit is to sale of the property. Most trust bridging exits to sale within 12-24 months of drawdown. Exit to refinance is far more limited. Very few UK residential mortgage lenders will lend to trustees, and buy-to-let lenders are even more restrictive. If the trust intends to retain the property long-term and let it on a commercial basis, investigating exit to BTL refinance early is important. If refinance is not available, the property will need to be sold to repay the bridging facility, with proceeds distributed to beneficiaries as per the trust deed.
Frequently asked questions
Can a trust take out a bridging loan in the UK?
Yes. Specialist bridging lenders accept applications from trustees, provided the trust deed permits borrowing and charging of assets. Trustees are named as the borrowers on the property charge. High street lenders do not typically lend to trust borrowers. Applications must go to specialist bridging lenders only.
What types of trust are accepted?
UK discretionary trusts and bare trusts are most commonly accepted. Jersey, Guernsey and Isle of Man trusts may be acceptable. Offshore trusts with overseas trustees are rarely accepted. Always confirm lender acceptance of your specific trust structure before instructing solicitors.
What must the trust deed say about borrowing?
The deed must explicitly permit trustees to borrow money and charge trust assets as security. If the deed is silent on borrowing, most lenders will decline. If borrowing is restricted (to certain trustees only, or subject to settlor consent), confirm this aligns with your application before proceeding.
What LTV can trustees achieve?
Typical maximum is 65-70% LTV on residential property. This is lower than the 70-75% available to individual UK residents, reflecting lender caution around trust structures. Strong exit evidence may push LTV toward the upper end.
Is trust bridging regulated?
No. Bridging to trusts is unregulated because a trust cannot be an owner-occupier and the borrowing is on a commercial basis. This means more flexible terms but also higher rates (0.70%-1.3% pm) and stricter underwriting than regulated borrowing.
What is the HMRC Trust Registration Service?
The TRS is a register of UK trusts, mandatory for most trusts created from June 2022 onwards and for most historic trusts as of September 2022. Lenders will ask for evidence of registration. Non-registration where registration was required may result in a declined application.
How long does trust bridging take to arrange?
Typical timeline is 8-12 weeks from submission to exchange, compared to 6-8 weeks for individuals. The extra time reflects the need for trust deed review, legal opinion on trustee authority, and more extensive AML documentation. Having all documents ready upfront shortens the process.
Can trust-owned property exit to a BTL mortgage?
Very rarely. Few UK BTL lenders will lend to trustees. Exit to sale is by far the most common and cleanest route. If you intend to retain the property long-term and let it, investigate exit options early before committing to bridging.
Can an offshore trust borrow?
The market is extremely limited. An offshore trust with overseas trustees will be rejected by most UK lenders. An offshore trust registered with HMRC TRS with UK-resident trustees might be acceptable to a small number of lenders. Discuss lender appetite with your broker before incurring legal costs.
What happens if the trust deed doesn't permit borrowing?
Most lenders will decline. Your options are to seek formal variation of the trust deed (costly and time-consuming through the courts), obtain written consent from a named person (settlor or beneficiary) if the deed requires it, or find a lender with more relaxed criteria (rare). Address this before approaching lenders.
Bridging through a trust requires careful legal structuring and specialist lender selection. Getting the legal opinion right from the start and choosing a lender comfortable with trust structures saves weeks of time and avoids costly legal revisions.
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