Trust registration service - clarification

Downthedrain

Reading through the process to register an IPDI trust and a couple of questions remain in my mind;

Scenario; Husband dies leaving 50% of property in trust for children. Wife's holds 50% and has right to live in the property. They were tenants in common.

Q1. The widow now holds the property on trust for herself and on behalf of the trustees. Is she named as a trustee as well as a beneficiary with regard to the IPDI trust?

Q2. If the widow is a trustee, can she be lead trustee?

Q3. Should the children be recorded as beneficiaries as well as trustees?

Keep_pedalling

She is the sole beneficiary of the trust so the answer to Q3 is no.

As for the trustees they can be any of you, but it would make sense for the younger generation to lead this. 

najan49

Is she (the widow) the sole beneficiary of the trust? The scenario says “Husband dies leaving 50% of property in trust for children.”

Keep_pedalling

najan49 said:

Is she (the widow) the sole beneficiary of the trust? The scenario says “Husband dies leaving 50% of property in trust for children.”

It’s an immediate post death interest trust in which the widow is now the beneficial owner, the trust the legal owner and the children are the remaindermen who don’t actually inherit until their mother’s death. 

Downthedrain

Would you clarify this? - I'm trying to consolidate my understanding  in relation to the following, where my interpretation is the widow becomes the legal owner (unless title is transferred to the trust) but with 50% equity, the other half being held on trust;

"Only the equitable title can be held as tenants in common. The legal title must and will always be held as joint tenants. This means that on the death of tenants in common where only one survivor remains, although the survivor does not acquire the equity share left by the deceased, he does become the sole owner of the legal estate. This means he and he alone has the right to deal with the legal title (sell, mortgage, gift etc). He holds the property on trust for himself and the beneficiaries under the deceased’s will."

This would be modified by any restrictions placed on the title. 

Keep_pedalling

On death the surviving spouse is effectively the beneficial owner of the house. Legal ownership is split between the survivor and the trust. For IHT purposes the deceased spouse’s share is covered by spousal exemption so does not use up their NRB or RNRB which can be transferred to survivors estate. On their death the share in trust passes to the remaindermen. For IHT purposes both shares of the house form part of her estate.

Because the remaindermen have no beneficial interest in the property until the surviving spouse dies, there will be no CGT liability and they do not lose their first time buyer status if they don’t own another property and are not subject to additional SDLT if they buy a house.

Downthedrain

Thanks for clearing this up - much appreciated.