I’m reviewing documents on behalf of a client, one of which is a declaration of trust. The client and his two siblings purchased their mum’s property in 2016 and the property is held by all three as tenants in common.
As part of the transfer there is a declaration of trust, allowing the mum to reside in the property for the rest of her life.
Does this need to be registered with the TRS? This is not a will trust and there’s no formal trust deed (other than the declaration of trust), indeed the trust does not have a name. I would argue it’s a co-ownership trust, which is exempt - but the mum being a party to the agreement and her protected rights are making me think otherwise?
It’s only an exempted co-ownership trust if the legal and beneficial owners are the same. Which by the sounds of what you say is not the case. So not exempt. But that’s just my take.
The declaration of trust appears to have created a life interest for the mother. If so, the children are joint settlors of a relevant property trust for IHT purposes, with all the implications that has.
The declaration of trust is the trust deed and if it does not set out all of the powers of the trustees, then the statutory default powers will apply (e.g. Trustee Acts 1925 and 2000 and the Trusts of Land and Appointment of Trustees Act 1996).
In any event, a declaration of trust creates an “express trust” which will be registrable on TRS unless the nature of the trust falls within any of the exemptions, which the case in question does not.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals