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    • tante
    • By tante 25th Aug 17, 3:55 PM
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    tante
    Confusion about status of a property partially left in trust to me
    • #1
    • 25th Aug 17, 3:55 PM
    Confusion about status of a property partially left in trust to me 25th Aug 17 at 3:55 PM
    When my dad died a couple of years ago, his will left half of my parents' house to me in trust - as far as I understand it, the arrangement is that my mum is really the owner of the house and can continue to live in it for as long as she wants without fearing any disruption from me, but when she dies, my dad's half will then pass to me.

    My mum didn't really think about this until coming to sell her house recently, but has now been told that because half is in trust to me - and I already own my own property - that half will be considered to be 'mine' and will be liable for a much larger stamp duty bill as my 'second property', even though I have no interest in the house and technically don't even own that half yet.

    We are a bit stumped by this as my mum's solicitor, who dealt with my dad's will etc, told her that she wouldn't have any problems when selling the house due to this arrangement, that it would all just proceed as normal... he must have forgotten that I would soon reach the age where I might buy a property of my own!

    For some reason he apparently put me on the land registry as co-owner as well, which doesn't seem logical at all - is it normal/necessary to do this when some of a house is being held in trust? I do not consider myself to own half of this property as it is still my mum's now.

    I am also a bit concerned that when I bought my first flat last year, I didn't even know about these trust arrangements and I bought my flat as my first/only property. Would me having a share of something waiting in trust make this incorrect?? It seems so absurd that half of a property I can't even live in or sell would be regarded as my 'first home' but now I'm scared that I did the wrong thing...!
    Last edited by tante; 25-08-2017 at 3:57 PM.
Page 2
    • getmore4less
    • By getmore4less 29th Aug 17, 12:15 AM
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    getmore4less
    I've just seen the scan and all is says is Title Absolute, PROPRIETORS - Mrs Mum of Address 1 and Ms Me of address 2.

    Then a "RESTRICTION: No disposition of a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court."

    My mum now tells me that the will is the only paperwork and she thinks that it is called a 'Will Trust', but she doesn't trust her solicitor to have done it right. I am slightly concerned that this doesn't seem to fit the criteria laid out in the Life Interest Trust document you linked.
    Originally posted by tante
    Standard for a will to set up the trust.
    No separate trust documents needed.

    Often you also make it clear the life tenant is responsible for the upkeep but when it is family often gets overlooked.

    You will be legal owner as a trustee.

    There is no need for that to be documented on the land registry.
    • xylophone
    • By xylophone 29th Aug 17, 12:33 AM
    • 23,395 Posts
    • 13,596 Thanks
    xylophone
    I've just seen the scan and all is says is Title Absolute, PROPRIETORS - Mrs Mum of Address 1 and Ms Me of address 2.

    Then a "RESTRICTION: No disposition of a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court."
    Then you and your mother are tenants-in-common?
    • tante
    • By tante 29th Aug 17, 4:06 PM
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    tante
    Then you and your mother are tenants-in-common?
    Originally posted by xylophone
    I think so, given that my mother and father were tenants in common, but now it turns out that the will doesn't actually leave my dad's half of the house to me at all if I understand it correctly - it is left to 'the Trustees', who are named as both me and my mum. There are no percentages stated, so I guess that would by default be half of his half to me, and half to my mum? So I was left a quarter of it.... but the 'residuals' were left all to me (don't think there were any).

    If I type in verbatim the two parts of the will that seem relevant is there anyone who could translate from legalese for me and tell me if this is right? My mum doesn't even seem to have the faintest idea about what has been set up or why and I am getting so frustrated...
    • tante
    • By tante 29th Aug 17, 4:09 PM
    • 10 Posts
    • 0 Thanks
    tante
    Standard for a will to set up the trust.
    No separate trust documents needed.

    Often you also make it clear the life tenant is responsible for the upkeep but when it is family often gets overlooked.

    You will be legal owner as a trustee.

    There is no need for that to be documented on the land registry.
    Originally posted by getmore4less
    Sorry, I'm getting confused by different posts seeming to conflict - when you say I am legal owner as trustee (even if that might be less than half of the property, depending on what confusing will means), does that mean I SHOULD have to pay second home rate stamp duty if my mother - life tenant - changes this property for another one?
    • xylophone
    • By xylophone 29th Aug 17, 6:08 PM
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    xylophone
    Have a read of these.


    https://wards.uk.com/online-services/legal-guides/flexible-life-interest-trusts/

    http://www.greenwoods.co.uk/knowledge-base/private-client/life-interest-trusts/

    http://www.telegraph.co.uk/finance/personalfinance/insurance/longtermcare/10946259/Am-I-affected-by-the-new-rules-on-trusts.html

    http://www.skerritts.co.uk/pages/10+things+advisers+need+to+know+about+the+residenc e+nil+rate+band


    Would it be as well to consult a STEP solicitor who will examine your father's will and advise on any action that needs to be taken?

    http://www.step.org/member-directory
  • Land Registry
    Then you and your mother are tenants-in-common?
    Originally posted by xylophone
    That is not strictly true although many people will look for this type of restriction, known as a form A, as evidence that the joint proprietors are tenants in common.

    The most likely scenario for the OP is that they are TIC on the basis of the will/trust being referred to. It appears they also registered the form A to protect that trust

    As getmore4less posted the will/trust is not documented with us. So for example you could have a will/trust which makes you TIC but no form A restriction is registered.

    And you could have a form A restriction on the register by default as no details of how the property was to be held were provided when the JPs were registered.

    Hence the register is not the definitive source re whether you are JTs or TICs.
    Official Company Representative
    I am the official company representative of Land Registry. MSE has given permission for me to post in response to queries about the company, so that I can help solve issues. You can see my name on the companies with permission to post list. I am not allowed to tout for business at all. If you believe I am please report it to forumteam@moneysavingexpert.com This does NOT imply any form of approval of my company or its products by MSE"
    • xylophone
    • By xylophone 30th Aug 17, 11:35 AM
    • 23,395 Posts
    • 13,596 Thanks
    xylophone
    Hence the register is not the definitive source re whether you are JTs or TICs.
    Indeed - the "practice guide" is linked in post 6.

    It seems to me that what needs to be established is whether by some action of mother or solicitor (?) the OP now has a beneficial interest in the property in her own right or whether she and her mother are legal owners of the share in the property as Trustees of a Flexible Life Interest Trust as set out in

    http://www.greenwoods.co.uk/knowledge-base/private-client/life-interest-trusts/ (which also details SDLT/GGT/IHT position) ? (And see posts 15 and 19).


    The share of the property is within the Trust and the Trustees hold as legal but not beneficial owners (although in this case the beneficiaries of the Trust are the trustees.

    It seems to me that for peace of mind and clarity as to the position, the OP would be well advised to see a STEP solicitor who would examine her father's will and advise.
    • SDLT Geek
    • By SDLT Geek 30th Aug 17, 8:30 PM
    • 22 Posts
    • 11 Thanks
    SDLT Geek
    Sorry, I'm getting confused by different posts seeming to conflict - when you say I am legal owner as trustee (even if that might be less than half of the property, depending on what confusing will means), does that mean I SHOULD have to pay second home rate stamp duty if my mother - life tenant - changes this property for another one?
    Originally posted by tante
    My view is that if, as seems likely, you and your mother as registered proprietors of the property are the legal owners holding on trust as to:
    (a) one half for your mother absolutely (the part she always owned)
    (b) the other half on the tusts of your father's will, with a life interest to your mother and a remainder to you

    then I would not expect the surcharge to be due:

    1. When the house your mother lives in is sold and replaced with another for her held on the same ownership structure or
    2. When you bought your first property.
    • SDLT Geek
    • By SDLT Geek 10th Sep 17, 8:13 AM
    • 22 Posts
    • 11 Thanks
    SDLT Geek
    Tante, you were going to go and see the solicitor to get an understanding of the will trusts and how the property is held. Did you end up with a satisfactory answer?
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