The look-back is what people miss. Twelve months is a long window, so a recent move does not automatically shut the door, and a longer absence normally does.

The rule also changed on 1 July 2024, and a lot of guidance has not caught up. What a protected trust deed is covers the solution itself.

For an individual, either habitual residence in Scotland at any time in the year immediately preceding the date the deed is granted, or an established place of business in Scotland within that same period. One of the two is enough.

The test, set out by who is granting

The condition sits in section 164 of the Bankruptcy (Scotland) Act 2016, and the Accountant in Bankruptcy checks the section 164 conditions before registering a deed as protected.

What the subsection does not say

It does not define habitual residence, and it says nothing about the electoral roll, a council tax bill or which address a creditor holds for you.

Equally, a postal address or a short visit will not create a connection that was never there. If you are near the line, get the position checked before anyone charges you anything.

The other conditions still have to be met

• Total debts including interest of not less than £5,000 at the date of granting, under section 164(3).
• A deed over a single estate, so couples cannot grant a joint trust deed.
• No trustee from an earlier sequestration still undischarged, under section 164(2)(a).
• Contributions over the payment period totalling less than your total debt including interest, under section 168(4).

Meeting the connection test is the entry condition rather than the whole test. How much debt you need for a trust deed in Scotland sets out the rest.

Only if you meet the twelve-month connection test. Someone who moved from Scotland inside the last year may qualify, and someone who has lived in England for several years with no Scottish place of business will not.

How the test lands on real situations

Those are illustrations of what the subsection asks rather than decisions on any particular case. The trustee has to be satisfied the condition is met, and AiB checks it.

The limb that gets left out

Almost every page written about this question mentions residence and stops. The business limb is the one that matters to a sole trader who has moved south and still trades in Scotland.

It is an alternative rather than an addition, so an established place of business in Scotland inside the year is enough on its own. Whether you can get a trust deed if you are self-employed covers the trading side.

If you cannot meet the test

A protected trust deed is a Scottish arrangement from start to finish, and it is not the equivalent of anything in England and Wales. An adviser in your own nation is the right person to speak to about the options there.

Section 164(1A) was inserted with effect from 1 July 2024. Deeds granted before that date were not subject to it at all, so guidance written earlier does not describe the current test.

The instrument that did it

The Protected Trust Deeds (Miscellaneous Amendment) (Scotland) Regulations 2024 came into force on 1 July 2024, and connection to Scotland is one of its eight regulations.

The same instrument brought in the removal of protected status, the refusal of a debtor’s discharge, early discharge for extenuating circumstances and the shorter dividend periods. It is the reason so much trust deed guidance is now out of date.

Which rules apply to which deeds

Part 14 of the 2016 Act applies to deeds granted on or after 30 November 2016, and deeds granted between 28 November 2013 and 29 November 2016 remain governed by the Protected Trust Deeds (Scotland) Regulations 2013, continued by a savings provision in the 2016 Act.

In practice a deed granted before 30 November 2016 will have run its payment period and been discharged years ago. It matters for accuracy rather than for most readers.

Yes. A body or entity qualifies through an established place of business in Scotland in the preceding year, or by being constituted or formed under Scots law and having at any time carried on business in Scotland.

Who can grant one at all

Section 164(1) allows a trust deed to be granted by a living individual, a partnership, a limited partnership under the Limited Partnerships Act 1907, a trust, a corporate body or an unincorporated body.

Limited companies and limited liability partnerships are outside it, because section 164(2)(b) excludes the entities referred to in section 6(2) of the 2016 Act.

Partnerships

A partnership can grant a trust deed over the partnership estate, and AiB is explicit that this does not protect the individual partners from bankruptcy for their personal debts. Which debts cannot be included in a trust deed covers what a deed does and does not release.

Each partner therefore has their own position to work out. Section 164(1) requires one estate per deed, so there is no combined route.

The connection test looks at the year before the deed is granted, and Part 14 contains no provision applying it again afterwards. What continues is your duty to co-operate, and that is where the risk sits.

The duty, and the sanction behind it

The Scottish Government’s page on what happens if your circumstances change during a trust deed puts it in one line: you must tell your trustee if your circumstances change.

The sanction is discharge. Section 184 makes your discharge depend on a trustee statement that you met your obligations and co-operated with the administration of the trust.

Since 1 July 2024 a trustee who says you have unreasonably failed to comply must apply to AiB on Form 5A for agreement to refuse your discharge. If that succeeds, your creditors are free to enforce again.

Four things to do before you go

• Give the trustee your new address and contact details in advance.
• Ask how contributions will be collected once you have moved.
• Ask what happens to any property in Scotland that has not yet been dealt with.
• Keep evidence of everything you send, because co-operation is judged on the record.

Losing contact with the trustee is the real risk, not the move itself. What happens if you move house or change jobs during a trust deed goes through the duty in detail.

Different statute, different oversight body, different register and different vocabulary. The biggest practical difference is the creditor decision, which works the opposite way round.

The two side by side

Silence from creditors counts as agreement in a Scottish trust deed, and how many creditors have to agree to a trust deed explains why that is the opposite of an approval vote.

Why the difference matters to somebody near the border

Marketing sometimes blurs the two, and a page written for one jurisdiction will describe a process that does not exist in the other. Anything mentioning a creditors’ meeting or a 75% vote is describing an IVA.

The Scottish Government’s own trust deed guide is the neutral starting point, and National Debtline and StepChange both cover the whole of the United Kingdom without charging.

Speak to a money adviser before you speak to a provider. Only a licensed insolvency practitioner can act as trustee, and AiB checks the conditions in sections 164 to 170 before registering the deed.

What the trustee owes you before anything is signed

Section 167(3) requires the trustee to give you a debt advice and information package and a trust deed information document, advise you on the consequences, and give you adequate time to consider it.

Scottish Ministers’ guidance sets adequate time at a minimum of three clear days, counted without the day the materials reach you and the day you sign. How to apply for a trust deed in Scotland sets out the whole sequence.

What granting one actually commits you to

• A payment period of 48 months from the date of granting, longer where payments are missed or where you and the trustee agree.
• The whole of your surplus income going to creditors during that period, under section 168(5).
• Your estate conveyed to the trustee, plus anything you acquire in the following four years.
• An entry on the Register of Insolvencies, which AiB’s information document says appears for the deed’s duration plus 12 months after completion.

Those consequences follow you wherever you live afterwards, which is why they belong in the decision rather than after it. Our trust deed page sets out how it works.

Where to get advice that costs nothing

Citizens Advice Scotland through your local bureau, StepChange, National Debtline, Money Advice Scotland and your council’s own money advice team. What free debt advice is available in Scotland lists them, and none of them charges.

A free adviser will compare a trust deed against the Debt Arrangement Scheme and sequestration on the same set of figures, which a provider selling one product will not.