PPR and implied trusts

Trusts Discussion
1

How can I make PPR available by using an implied trust?

A owns a property in his sole name which he purchased so his son could live there as a student. He now wishes to gift the property to his son but there is a substantial CGT liability. I understand that if he proves a constructive trust to HMRC, the son will be able to have his own PPR as a beneficiairy of the trust. I believe that HMRC will want to see that the arrangement for the son operated in practice in exactly the same way that a trust would have.

My question is how do I go about trying to establish a constructive trust with HMRC?

Tricia Longmore
Large & Gibson

2

I don’t see how you can on these brief facts - they simply don’t bear it out.

The fact he is thinking of “gifting” it to son also contradicts the suggestion that son is already the beneficial owner.

Do they have any evidence/explanation to suggest that the son was to be the beneficial owner from the purchase (which would hopefully include an explanation as to why he bought in his own name)? Did father mention it to the conveyancer at all?

The facts you give describe a common arrangement but not a trust.

Andrew Goodman
Osborne Clarke LLP

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