Declaration Of Trust

gabthoms

Hi all, my parents gave myself and my partner some money towards buying a property about 10 years ago. My dad wanted to safeguard the money by drawing up a declaration of trust which stated that if we were to sell the property then the money that my parents gave us would be paid back to them. My dad has since passed away and my mum wants to get rid of the declaration of trust as she does not want the money back. I have spoken to a solicitor and it is quite an expensive process to terminate the declaration of trust. I was hoping someone would have any advice on whether it is worth going through the process or just leave it in place. The solicitor said the money would go back into my mum's estate in the event of her death but I don't understand how this would affect the property that the money has been used for. Any advice would be appreciated.

GDB2222

How much is your mum's estate likely to come to?

gabthoms

GDB2222 said:

How much is your mum's estate likely to come to?

At the moment it is around £400,000

SDLT_Geek

There will be capital gains tax to think about as well on the disposal of the share in the property, assuming, as seems likely, that the effect of the declaration of trust was to give a share in the property to the parents.

If there is no mortgage there should be no stamp duty land tax on the gift.

Later edit:  From information OP has since supplied it seems that the "declaration" is just recording a loan, not giving a share in a property.  If so, then CGT and SDLT are unlikely to be issues.

getmore4less

What does the declaration say?

gabthoms

The declaration states that the loan is repayable to my parents if the property was to be sold. It was put in place as I had not been with my partner for long and my parents did not want to lose any of the money if the relationship broke down between myself and my partner as we are both co-owners of the property. This was put in place over 10 years ago and my mum has said she doesn't want the money back and wishes we could get rid of the declaration.
I'm trying to get advice on whether the declaration needs to be cancelled (quoted £1500) or could it just be left in place to be resolved at a later date. How is the declaration enforced and is it just handled by myself as I am the executor of my mum's will?

Thanks for the advice so far

SDLT_Geek

gabthoms said:

The declaration states that the loan is repayable to my parents if the property was to be sold. It was put in place as I had not been with my partner for long and my parents did not want to lose any of the money if the relationship broke down between myself and my partner as we are both co-owners of the property. This was put in place over 10 years ago and my mum has said she doesn't want the money back and wishes we could get rid of the declaration.
I'm trying to get advice on whether the declaration needs to be cancelled (quoted £1500) or could it just be left in place to be resolved at a later date. How is the declaration enforced and is it just handled by myself as I am the executor of my mum's will?
Thanks for the advice so far

This sounds just like there is a debt, not a share in a property, in favour of your parents.  This should be easier to deal with. 
It is odd that OP refers to it as a "declaration of trust" as this normally implies that a property is held in shares.  It would be as well to have the "declaration" looked at properly to check its legal effect.