Property in Will.

John_Pierpoint

stuart2088 wrote: »

Thanks to all for your replies.
The Trustees are the two Executors ie. my brother and the Solicitor.

On sale of the property my brothers share goes to him in cash..... no Trust there.

The issue i have now is my brother wishes to improve/refurbish the property ready for rental.

He expects me to pay half the costs as i will benefit from the rental income.

Where do i stand on this one as it would appear i do not own the property.

The trust is entitled to charge professional fees against the rental income. even HMRC allows 10% of the rent against fair wear and tear for a furnished property, plus the costs of issuing rental contracts etc.

Just as HMRC would not allow capital expenditure to be charged against the rent, nor would you; like for like repairs will be an expense against income.

Each year you should get an R185 that you would use to complete your self assessment tax return:
.
R185 - (Trust Income) - Statement of income from trust


www.hmrc.gov.uk/pdfs/r185_ti.pdf‎
R185(Trust Income). Page 1. HMRC 01/12. Statement of income from trust. Trustees may use this form to advise the beneficiary about their income payments or ...

Have you told us who the "remainder man" is ? Who gets your share when you die? How old are you ? The "remainder man" should be interested in developing the house and be prepared to chip in some capital money if redeveloping the house would make a nice big capital uplift.

You have not stated the capital taxation position when you die, that needs to be considered too.

John_Pierpoint

ValHaller wrote: »

But it seems to me that your brother is has a strong conflict of interest between his duties to you as trustee and his own share in the same property. Added to the clout that the role of executor gives him, I cannot see that he is in any position to fulfil his duties to you as trustee.

I would think that the deceased could see this situation developing and that is why the solicitor has been hired to oversee the running of the trust and make sure everything is done correctly and legally.

If you want to help your relative running the rental, I am sure fielding the calls about the central heating going off on Xmas day, would be appreciated and a lot cheaper than getting the solicitor and the rental agent into the loop..

ValHaller

John_Pierpoint wrote: »

I would think that the deceased could see this situation developing and that is why the solicitor has been hired to oversee the running of the trust and make sure everything is done correctly and legally.

I think that the deceased as has been hinted here felt that OP could not be trusted with the money and took some quite ill-judged decisions which seem guaranteed to cause friction between the brother over their lifetimes. That is not to say that the deceased was wrong to identify an issue

madbadrob

The question I would be asking based on what has been said in the last few posts is this. Has my share of the house has been willed into a trust do I therefore own that half? I would say no because this has been set up this way for whatever reason but likely because the deceased wanted you to have money for all your life not just for the immediate minute when it is given to you.

If that is the legal position why should the OP pay anything towards making repairs or improvement costs. To be fair there will not be any great difference in rental achievability from a modern house to one that is old fashioned. The problem would be getting a tenant.

I still think this case needs urgent legal advice and not with the solicitor who is joint trustee neither

nom_de_plume

madbadrob wrote: »

If that is the legal position why should the OP pay anything towards making repairs or improvement costs.

One way or the other he will be paying towards them. The question is not so much will he but rather how and when. Assuming the rental plan goes ahead I see either the OP put some cash into a kitty for repairs and the like and draws a full income from the property from day one or puts nothing in and takes either a reduced income or a zero income until such time as the alternative source funding is paid back.

ValHaller

madbadrob wrote: »

The question I would be asking based on what has been said in the last few posts is this. Has my share of the house has been willed into a trust do I therefore own that half? I would say no because this has been set up this way for whatever reason but likely because the deceased wanted you to have money for all your life not just for the immediate minute when it is given to you.

If that is the legal position why should the OP pay anything towards making repairs or improvement costs. To be fair there will not be any great difference in rental achievability from a modern house to one that is old fashioned. The problem would be getting a tenant.

I still think this case needs urgent legal advice and not with the solicitor who is joint trustee neither

AS OP does not own that half of the house, it is not for OP to fund any improvements. It is for the trust and the brother to do it and for OP to sit back and let the money roll in

As I see it the arrangement is deeply unsatisfactory for both brother and OP

nom_de_plume

John_Pierpoint wrote: »

I would think that the deceased could see this situation developing and that is why the solicitor has been hired to oversee the running of the trust and make sure everything is done correctly and legally.

As someone who owns a piece of rental property that will make a great pension plan and as a father of 2 children, one of whom would just want to spend, spend, spend, I can totally see where you are coming from!

nom_de_plume

ValHaller wrote: »

AS OP does not own that half of the house, it is not for OP to fund any improvements. It is for the trust and the brother to do it and for OP to sit back and let the money roll in

One way or the other he will fund it. See my post ^^^

stuart2088_2

Thank you to all for your replies much appreciated all good points.

However it is a complex issue and i feel more confused..... although fully understand the points made.

I will see another solicitor asap and run it by them.

John_Pierpoint

Think yourself lucky or very unlucky that you have a life interest in half.
One of the reasons that England was the starting point for the industrial revolution was that some families had conserved and built up capital by leaving everything to the first son or the most capable son. His siblings could make an advantageous marriage or join the church, the army or if sufficiently motivated go an found a dynasty of their own in the colonies. The females had only one of those options.

http://en.wikipedia.org/wiki/Primogeniture

Read a Jane Austen novel, it will explain the situation quite well - Mansfield Park, built on the profits from slavery, is the one I was forced to read for "O level" (GCSE for those born before WW2 or in the latter part of the 20th century)

http://en.wikipedia.org/wiki/Mansfield_Park