The number of trust funds in the UK dropped 6% in 2017-18 from the previous year according to the latest statistics from HM Revenue & Customs.
There were 149,000 trusts which submitted a tax return in 2017-18, down 6% from 159,000 in 2016-17 . The number has been in steady decline: there were 220,500 trusts and estates in the UK in 2005-06, in 2013-14, when there were 171,500.
Trusts have to register with HMRC if they pay or owe capital gains tax, income tax or inheritance tax.
Wealthy families often create trusts to minimise hassle and fees and also to pass on assets in a tax efficient way. But the introduction of an online register of trusts in 2017 has made some families more reluctant to use trusts due to concerns about privacy.
However, tax revenue from trusts and estates grew. Trusts' total declared income for the year rose 12% to £2.73bn year-on-year. Chargeable gains were unchanged at £3.23bn, although chargeable gains made by trusts paying tax at the special trust rates fell by 3% to £1.445bn.
Only 3,000 trusts received more than £100,000 in income during the year, but those that did accounted for nearly 60% of the sector's total income.
From January 2020, it will be mandatory for all trusts to register with the HMRC, regardless of whether or not they have tax consequences.