I have a client who lives in England. He and his brother have inherited their late mother’s house in Scotland. It has been agreed that my client will purchase his brother’s half share of the house and he wishes to place this one half only into trust for his daughter, who is 15 i.e. the trust will own one half and my client will own the other half. The trust cannot purchase the interest in the property and presumably this will be a gift to the trust from my client, subject to comments below re use and reservation of benefit. I have not yet gained information as to whether title to the property still rests e.g. is it still estate property or has it been transferred to the beneficiaries under the will already.
The property needs to be renovated and the trust has no means of funding that. My client intends to pay for all renovations. Is that a loan to the trust?
The property will sit empty and will only be used by my client if he is in Scotland or perhaps for family holidays. If there is no rent paid by my client to the trust for use, I have concerns about gifts with reservation of benefit.
The trust will have no means of paying any share of upkeep or insurance etc.
Am I being overly cautious in my considerations?
Any thoughts would be appreciated.
Lesley McDermid
Kerslands Solicitors Limited