Trust deeds, employment and self-employment

Check employment terms before signing

Some employers restrict roles for people subject to a trust deed, particularly in financial services. Check the employment contract and any relevant professional requirements.

If the wording is unclear, seek a confidential explanation from an appropriate adviser or the organisation responsible for the rule. Do not assume a general online answer overrides a specific contract.

Company directors

Directorship needs particular attention. Scottish guidance says you cannot be a company director unless the arrangement permits it. Establish the position with the trustee before signing rather than treating it as an administrative detail to resolve later.

Tell the adviser about every directorship and any personal guarantees. A company’s borrowing and your personal liability are not automatically the same thing.

Self-employment

A trust deed can affect continuing to operate a business. Discuss its assets, liabilities, bank arrangements, contracts and income with the trustee. Do not assume that being able to make a monthly payment is the only consideration.

Prepare accounts or trading records, tax information, essential operating costs and a description of the tools or equipment you need. Identify what you own personally and what belongs to a separate business entity.

Variable and seasonal income

Show a representative trading pattern, not only your best month. Explain seasonal changes, outstanding invoices and foreseeable periods without work.

Ask how the proposed contribution will respond to variation and what evidence will be requested at review. The annual review guide provides a practical document checklist.

Before making a commitment

Make a short written list of the consequences you need clarified:

• Does my contract or professional role require disclosure?
• Can I continue a directorship or trading activity on the proposed terms?
• What happens to essential business assets?
• How are personal guarantees and relevant liabilities recorded?
• What changes in income must I report, and when?

Use the answers to compare the Scottish alternatives. If keeping a particular job or business activity is essential, that fact belongs at the start of the assessment.

If work changes after signing

Tell the trustee about a new role, reduced hours or a material change in trading. Ask for the implications to be assessed before assuming the original budget and permissions continue unchanged.