How to register BTL jointly owned with minor

royw

My under age child has inherited some money & I intend to buy a buy-to-let property in which she will have approx 15% stake & I will own the rest. As she is a minor I believe I need to set up a bare trust. How do I register the property? Tenants in common with a deed that specifies how much we each own, or in my name only as I am both owner & trustee? Presumably need aome other document that registers interest in it. Have had conflicting advice from solicitors.
With her portion of the rental income is there an easy way to increase her percentage of the property each year?

ValHaller

I know nothing about this, but it appears to me that you will have a conflict of interest if you operate as trustee and co-owner. I would be interested to see any reasoning as to why it might not be.

getmore4less

Were there any term on the inheritance.

AIUI normaly if under 18 it would allready be in a trust with executors as trusties unless others were appointed by the will.

presumably you won't be borrowing money on a mortgage.

royw

The will states £x to the grandchild (my daughter) but if under 18 it can be paid to the mother for the maintenance, education & benefit of the grandchild. It is now in my account. There is no mention of a trust in the will, I think I need this only because as a minor she can't own property.
This will be a bare trust not a discretionary one & could have either myself or myself & husband as trustees. Is conflict of interest relevant in this case? I can't see what I could do as co-owner that would disadvantage the child.

ValHaller

royw wrote: »

I can't see what I could do as co-owner that would disadvantage the child.

Buying the property for a start creates an issue, as you have discretion here. Suppose your 85% is on a mortgage and you fail to manage the property so that it does not cover the mortgage. Property is repo'd. In that case, the conflict would not be in the running of the property but in the purchase - if you needed the child's 15% available to get a mortgage.

Not alleging that you would make a mess up of this. But the issue would be that you put the child's money at risk for your own gain. You should take legal advice IMO before going down this road.

Annisele

royw wrote: »

The will states £x to the grandchild (my daughter) but if under 18 it can be paid to the mother for the maintenance, education & benefit of the grandchild. It is now in my account. There is no mention of a trust in the will, I think I need this only because as a minor she can't own property.

In that case I think you might already be holding the money on trust. If it was paid to you for your daughter's maintenance etc, then it isn't really your money - it's hers. I'm not completely convinced the executors should have paid the whole sum out to your personal bank account (assuming we're not talking about peanuts), but that's now beside the point.

I agree you might have conflict of interest issues. If you really are holding the money on trust for your daughter, then you have a duty to act as a prudent trustee. Putting all of it into one single asset creates a significant diversification risk.

royw

Have tried legal advice but conveyancing solicitors don't seem to know much about trusts! No mortgage involved. I don't need her 15% to buy, if anything the other way round. I'm buying so that she will have a decent return on her capital & an asset that she can sell, continue to draw income from or live in when she is older.

ValHaller

royw wrote: »

Have tried legal advice but conveyancing solicitors don't seem to know much about trusts!

No surprise there. You are looking at the wrong type of solicitor. One which deals in wills and probate would be more likely to have the relevant expertise.

Mojisola

royw wrote: »

Have tried legal advice but conveyancing solicitors don't seem to know much about trusts! No mortgage involved. I don't need her 15% to buy, if anything the other way round. I'm buying so that she will have a decent return on her capital & an asset that she can sell, continue to draw income from or live in when she is older.

Don't you know anyone who has a property which is now worth less than when they bought it? I do.

royw

ValHaller - yes, you're right. Trouble is they know nothing about how to register the property. Haven't found one yet who knows both.

Mojisola - yes I do - the person I am buying it from! Return on BTL is more than any other investment I know of (though I'm sure someone else will know of something better). In 10 years time I think it's very unlikely prices will be less than they are now. If I'm wrong then daughter will have lost out but no-one has a crystal ball (and she will still have somewhere to live).

Mojisola

royw wrote: »

Mojisola - yes I do - the person I am buying it from! Return on BTL is more than any other investment I know of (though I'm sure someone else will know of something better). In 10 years time I think it's very unlikely prices will be less than they are now. If I'm wrong then daughter will have lost out but no-one has a crystal ball (and she will still have somewhere to live).

Only if that's where she wants to live.

No-one knows what the property market will be like in ten years time. The money won't be of any use to her if the property won't sell.

I don't think it's a good idea to tie a minor's money up in property.