What a trust deed costs
A trust deed has fees. The trustee is paid for running it, and the Accountant in Bankruptcy charges statutory fees too. Here is how the fees are set, where the money comes from and what to ask.
A trust deed has fees. Under section 183 of the Bankruptcy (Scotland) Act 2016, a trustee can only be paid a fixed fee, an additional fee based on a percentage of the assets and contributions they collect, and outlays (expenses). The Accountant in Bankruptcy (AiB), Scotland’s insolvency service, also charges statutory fees. All of these come out of the money paid into the trust deed, before your creditors are paid.
Knowing how fees work helps you compare a trust deed fairly with the other options, some of which cost you nothing to set up. Free, impartial advice is available from the services in free debt advice in Scotland.
How are a trustee’s fees set?
The law allows your trustee to be paid in three ways, and only these three:
- A fixed fee for running the whole trust deed, set out on a prescribed form.
- An additional percentage fee, worked out as a percentage of the total assets and contributions the trustee collects (realises) during the trust deed.
- Outlays, meaning expenses the trustee incurs after the trust deed is signed. The only earlier cost allowed is a single valuation of land or buildings you own, such as your home.
There is no statutory cap on the fixed fee or the percentage. Instead, the fees are disclosed up front and controlled by your creditors and AiB.
The fixed fee can only rise if something happens that could not reasonably have been foreseen. An increase needs approval from a majority in value of your creditors, or from AiB after all creditors have been asked. AiB guidance says your own default, or routine matters, do not count as unforeseen.
What is Form 3?
Form 3 is the prescribed form on which your trustee records the fixed fee and the percentage that the additional fee will be based on. The trustee sends it to your creditors during the 5-week objection period, and then to AiB when the trust deed is put forward for protection.
This means your creditors can see the proposed fees before they decide whether to object. You can ask to see the same figures before you sign.
What does the Accountant in Bankruptcy charge?
AiB charges fees set by the Bankruptcy Fees (Scotland) Regulations 2018. These are the current fees for protected trust deeds:
| Fee | Amount |
|---|---|
| Register of Insolvencies notice, sent electronically | £40 |
| Registering a protected trust deed | £40 |
| Supervising the trustee, for each 12-month period or part of one | £120 |
| Auditing the trustee’s accounts and fixing their pay | 5% of the trustee’s fees and outlays, after certain costs such as statutory fees are taken off |
The supervision fee rose from £100 to £120 on 1 July 2024. The trustee can recover AiB’s audit fee from the trust deed as an outlay.
Where does the money for fees come from?
The costs of the trust deed are taken from your payments and any assets before your creditors are paid. You do not get a separate bill.
AiB’s trust deed information document explains that:
- the trustee’s fees come from your monthly payments
- at first, more of your payment goes to fees, and over time more goes to your creditors
- your trustee will explain the fees to you before the trust deed starts
- the fees do not affect what you must pay, or for how long
What fees do affect is how much your creditors receive. For trust deeds granted on or after 1 July 2024, creditors get their first share of the money (a dividend) after 12 months, then every 3 months.
If a third party, such as a firm that did work for you before you signed, is owed money for that work, the law says that debt does not rank ahead of your other creditors. The trustee cannot claim the cost of pre-signing work as an outlay of the trust deed.
Who checks that fees are fair?
AiB supervises trustees and can audit their accounts at any time. When it audits a trustee’s fee, it looks at whether the fee is appropriate, reasonable and in proportion to the work done. AiB can reduce a fee if, for example, the trustee claimed for work that was not completed, or applied a higher percentage than the one declared on Form 3.
The trustee, you or a creditor can appeal AiB’s decision to the sheriff (a judge in Scotland’s local sheriff courts). You or a creditor would need to satisfy the sheriff that you have, or are likely to have, a financial interest in the outcome.
Trustees also follow a professional standard for Scottish trust deeds, Statement of Insolvency Practice 3.3. It requires them to explain all your debt options, not just a trust deed, and to disclose the likely costs.
Want the costs explained for your situation? Tell us a little about your situation and a licensed insolvency practitioner firm will call you to go through every option, including ones that are not a trust deed.
May not be suitable in all circumstances. Fees apply. Your credit rating may be affected. Free, impartial advice is available from MoneyHelper and other services.
What should you ask about fees before you sign?
Ask for the answers in writing, and take your time. You must be given at least 3 calendar days to consider the information before you sign.
- What is your fixed fee, and what percentage will your additional fee be?
- What outlays do you expect, such as a valuation of my home?
- Can I see the figures that will go on Form 3?
- Roughly how much of my payments will go to my creditors over the whole trust deed?
- When are my creditors likely to receive their first dividend?
- In what situations could the fixed fee go up?
- Did another firm refer me to you, and was it paid for the referral?
- What would a Debt Arrangement Scheme, sequestration or the Minimal Asset Process cost me instead?
On referrals: Statement of Insolvency Practice 3.3 requires the trustee to tell your creditors who referred you and what was paid to the referrer. You can read how this website works and how it is paid. There is a longer checklist in before you sign a trust deed.
How do the costs compare with other options?
- Debt Arrangement Scheme (DAS): a money adviser cannot charge you for setting up a debt payment programme. Fees of 2% to AiB and 20% to the payments distributor come out of your payments before they reach creditors, and you pay nothing extra. See the Debt Arrangement Scheme.
- Sequestration: the application fee is £150. It is waived for people on Universal Credit and some other benefits, people who had Scottish Welfare Fund help in the last 3 months, and people the Common Financial Tool shows have no surplus income.
- Minimal Asset Process (MAP): there has been no application fee since 6 February 2023.
Free money advice services do not charge for their advice.
Official sources
- Bankruptcy (Scotland) Act 2016, section 183: trustee’s remuneration
- Bankruptcy Fees (Scotland) Regulations 2018, Schedule
- AiB Notes for Guidance: protected trust deeds (sections 6.7, 6.8 and 7.2 cover fees)
- AiB protected trust deed information document
- ICAS: Statement of Insolvency Practice 3.3 (Scotland), trust deeds
Common questions
Do I pay trust deed fees on top of my monthly payment?
No. The Accountant in Bankruptcy says the trustee's fees come from your monthly payments and do not change what you pay or for how long. What fees do change is how much of your money reaches your creditors. In the early months more of each payment goes on fees, and over time more goes to your creditors.
Is there a cap on trust deed fees?
There is no fixed legal cap on a trustee's fees. Instead, the law controls how they are set: a fixed fee and a percentage fee recorded on Form 3 and sent to creditors, plus outlays. The Accountant in Bankruptcy can audit the trustee's accounts and reduce fees it does not consider appropriate, reasonable and in proportion to the work done.
Can the trustee increase the fee later?
The fixed fee can only go up for work that could not have been foreseen when the trust deed was set up, and only with approval from a majority in value of your creditors or from the Accountant in Bankruptcy. AiB guidance says your own default and routine matters do not count as unforeseen, so ask what would happen to fees if your circumstances changed.
Can I be charged for work done before I sign?
The trustee cannot claim the cost of work done before the trust deed was granted as an outlay of the trust deed, apart from a single valuation of land or buildings you own. If a third party is owed money for work done before you signed, that debt ranks the same as your other creditors' claims, not ahead of them. Ask in writing about any charges before you sign.
Related guides
- How your trust deed payment is worked out The Common Financial Tool, surplus income, benefits and payment reviews explained.
- Before you sign a trust deed The information and time you must be given, questions to ask, and how to check an insolvency practitioner.
- The Debt Arrangement Scheme (DAS) Repay your debts in full through one payment, with interest and charges frozen.
- Sequestration (bankruptcy in Scotland) How bankruptcy works in Scotland, who can apply, what it costs and what it means for you.