Land Registry procedure


(gail.w) #1

Can I ask members what arrangements they put in place at the Land Registry where the Deceased leaves an equitable share of a home owned as tenants in common on trust for the spouse to occupy and then to children? Our Land Registry say that some solicitors leave the property in the name of the surviving legal owner and rely only on the form “a” restriction already entered. Some enter a restriction in form( ii), and some arrange for surviving owner to appoint the children as co-Trustee. What is the safest way?

Gail Weston

WMB LAW SOLICITORS


(Simon James Northcott) #2

I suggest a restriction in form A and the trustees of the trust and the spouse being trustees of the legal estate if the surviving spouse agrees

Simon Northcott


(gail.w) #3

Many thanks for your reply. I was in need of some reassurance. The form ii restriction mentioned by our Land Registry helpline didn’t seem to offer enough protection.

Gail Weston

WMB LAW SOLICITORS


(claire.flood162) #4

I use Form A and Form N and have started to use Form NN recently whereby you don’t have to pay the Land Registry fee for a restriction. I also submit the deed of appointment of trustees.

The property is transferred into the name of the survivor. I believe adding the children or other third parties to the Land Registry makes a difference to the eventual CGT treatment of the property and I think they are treated as owning a second property so it may have SDLT consequences if named.on the title.

Claire Flood
CLAIRE FLOOD SOLICITORS


(gail.w) #5

Thank you Claire. Is there a CGT issue where Trustees hold the property for a beneficiary occupying the property?

Gail Weston

WMB LAW SOLICITORS


(cp1) #6

As I read it the property in question is a beneficial interest under a trust. As such a Notice of the interest is prohibited by LRA s 33. However a Form A restriction is obligatory since the trust will not terminate should the trustees be reduced to one only (LRA s 44).

So long as there are two or more trustees (or a trust corporation), then pursuant to sections 2 and 27 of the LPA 1925 the beneficial interests shall, notwithstanding any stipulation to the contrary, be overreached by the conveyance, Any conveyance by the trustees will be effective regardless of the presence or absence of any consent or notification; and the transferee is entitled to be registered as proprietor.

It follows that no only are restrictions in forms N, NN (which are registration subject to a consent) or II (which required confirmation of notification) ineffective but that it is inappropriate to enter any of these on the Register.

By virtue of section 77 anyone who applies for a restriction without reasonable cause may be liable to any person who suffers damage in consequence.

The only answer to the question is to arrange that the legal estate is vested in trustees who can be relied upon… (with a Form A restriction). The Land Register does not, nor was ever intended to, provide mechanisms to protect interests under trusts.

Clifford Payton
Alpha Court Chambers


(Simon James Northcott) #7

There are no CGT or SDLT issues from simply being a trustee of property.

Simon Northcott


(claire.flood162) #8

Sorry I have been away for a few days. I have some very old notes (around 2008/9) that I still rely on from Chris Whitehouse about old style NRBDT that state that to avoid CGT complications to put the title to the property in the sole name of the co-owner as opposed to the trustees… I have done the same for IPDI trusts and have always had the uplift on death from HMRC. Whether it would have worked the same with the joint co-owners and ultimate beneficiaries showing on the title deeds I’ve never taken that risk. I always believed there was a difference and that the co-owners shares were subject to CGT for as well as being trustees they are the ultimate beneficiaries. I am sure another forum member can tell the correct CGT situation.

Claire Flood
CLAIRE FLOOD SOLICITORS