I keep coming across conflicting information as to whether a co-ownership trust where the trustees are also the beneficiaries needs to be registered with the TRS if all of the trustees are not on the Land Registry title. I.e. Trustees are A, B & C and they are also the beneficiaries but only A appears on the Land Registry title. Most of the information I have come across suggests that only A can be said to be the legal owner and therefore the trust should be registered with TRS but recently I have read that in fact it doesn’t matter whether all of them are on the title or not - it doesn’t need to be registered with TRS. The latter would make more sense to me and remove an awful lot of admin, but I would be grateful if someone could clarify the position for me.
TRSM23050 addresses the issue where there are more than four trustees. HMRC suggest that this will only be excluded as a trust imposed by an enactment, namely s.34(2) LPA: para 1 Sch 3A of the regs. (This is in fact reinforced by s.34(2) TA 1925 so that the rule applies to a trust of land at all times not just when first conveyed). In their view it is not excluded as co-ownership under para 9 if there are four trustees who are beneficiaries but also a fifth who is not a trustee.
The slight snag is that para 9 “Co-ownership” makes no reference to that section or the proprietorship register at HMLR. It merely requires the property to be jointly held and the trustees and beneficiaries to be the same.
A duly appointed trustee is still such even if not named as legal owner at HMLR. Indeed the title could be held by a non-trustee. That would clearly rule out para 9 (and it might not be registrable at all because a resulting or constructive trust, so not express). Para 9 is apt to apply to unregistered land and indeed personal property.
So unless their number exceeds 4 a trustee of land is a trustee for para 9 and must be counted even if the legal title is not vested in him, her or it.
In the OP, in my view, para 9 applies because A B and C are both the legal trustees and also the beneficiaries and would be so even if the legal title was held by X.
S.34(2) TA is in fact the more important as it enacts a substantive rule of law that trustees of “land” cannot exceed 4 in number. Under the 1996 TOLATA amendment this phrase applies to any trust which includes land. Its effect is that a named fifth trustee of a trust of land is not in law a trustee of the trust concerned at all. So a trust of jointly owned land can never have more than 4 trustees whereas a trust of other property can.
It is not entirely clear to me why para 1 does not exclude every case of joint ownership of land since s.34(2) LPA seems to be an enactment imposing a trust, including one that falls outside para 9. At least where there are two or more grantees (the sense here seems to exclude a sole grantee who could not be a joint tenant).
Jack Harper