Property in Trust

Hi could anyone give some advice please, my sisters partner , was left a property which has no mortgage on which he rents to his daughter and her partner below market rate. As the property is quite small they would like to extend. He is going to leave the property to his daughter when he dies. He wanted to know if the property was put into a trust, could his daughter raise the money against the property to fund the extension,  he would still require a rent to be paid to help cover his bills, is this an option for him?  Thanks

Comments

  • LadyGnome
    LadyGnome Posts: 801
    First Anniversary Name Dropper First Post Combo Breaker
    Forumite
    Trusts are a horribly complex area of law and trusts  can have tax implications.  The decision making vests in the trustees who have to pursue the objects of the trust. Whether or not the trustees can and will mortgage the property will depend on the terms of the trust. Your sister’s partner also needs to consider deprivation of assets rules for social care. 

    This is an area where legal advice is essential. 
    MortgageStart Nov 2012 £310,000
    Oct 2022 £143,277.74
    Reduction £166,722.26
    OriginalEnd Sept 2034 / Current official end Apr 2032 (but I have a cunning plan...)
    2022 MFW #78 £10200/£12000
    MFiT-6 #28 £21,772 /£75000
  • Thanks for that, sounds very complex i will let him know
  • LadyGnome
    LadyGnome Posts: 801
    First Anniversary Name Dropper First Post Combo Breaker
    Forumite
    edited 26 August 2020 at 10:34AM
    I am legally qualified but if I wanted to set up a family trust or similar I would go and see a trusts lawyer. 
    MortgageStart Nov 2012 £310,000
    Oct 2022 £143,277.74
    Reduction £166,722.26
    OriginalEnd Sept 2034 / Current official end Apr 2032 (but I have a cunning plan...)
    2022 MFW #78 £10200/£12000
    MFiT-6 #28 £21,772 /£75000
  • peb
    peb Posts: 1,681
    Name Dropper Combo Breaker First Post First Anniversary
    Forumite
    As lady Gnome says trusts are very specialist.  However I would just point out from a property law point of view, which is seperate to the trust issue, it's not going to be easy to raise finance in the circumstances that you describe.  There are three issues that jump out, obtaining finance as a trust, obtaining finance before six or twelve months after a change in ownership and the rent firstly to a family member and secondly below market rent.
Meet your Ambassadors

Categories

  • All Categories
  • 341.7K Banking & Borrowing
  • 249.7K Reduce Debt & Boost Income
  • 449K Spending & Discounts
  • 233.8K Work, Benefits & Business
  • 606K Mortgages, Homes & Bills
  • 172.4K Life & Family
  • 246.5K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.8K Discuss & Feedback
  • 15.1K Coronavirus Support Boards