Afternoon all, The TRS manual clarifies that trusts of property where there are more than 4 owners do not need to be registered as they are imposed by law:-
TRSM23050: "In England and Wales, it is only possible for a maximum of four persons to be listed as the legal owners of the land with the Land Registry. Where land is held by more than four persons, section 34(2) of the Law and Property Act 1925 provides that the land is to be held in trust for the benefit of all the persons who have a beneficial entitlement to the land.
As the trustees and beneficiaries of this trust are not the same persons, this is not an excluded co-ownership trust. However trusts created for this purpose are excluded from registration as trusts imposed by legislation – see [TRSM23140]."
s 34(2) states … if there are more than four grantees, to the four first named in the conveyance, as joint tenants [in trust for the persons interested in the land].
So if, for convenience, land is conveyed to four owners but subject to a bare trust agreement which states it is held for say, six BO’s, would this need to register as not all the BO’s are named in the conveyance so it is not the law that has imposed the trust but the bare trust agreement?
I am an accountant not a lawyer so hope I am over thinking this…
I am specifically looking at in the context of private members clubs so any related thoughts on how they do/do not fit in with TRS would be gratefully received!
As with everything TRS related, it is likely a grey area.
I’m afraid (at least in my view) you should probably read the “imposed by legislation” exclusion as only applying where the land is nominally conveyed to more than 4 legal owners - meaning that only the first 4 can be registered and s.34 imposes a trust. That would be a trust imposed by legislation and that is also the example given in the manual.
You might read the exception as including circumstances where the situation is anticipated and a bare trust put in place - because i’m guessing no sensible conveyancer would convey land to more than 4 legal owners if they had a choice. I don’t think the exception covers that - the bare trust was put in place to avoid the trust imposed by legislation - but you might get some plausible deniability as it is so similar.
On a good day you might get something in writing from HMRC to accept it is within the exception but I wouldn’t hold your breath i’m afraid.
Steph - did you ever illicit a response from HMRC? Considering the example given in TRSM23050, I would think the exclusion doesn’t cover the pre-considered thinking of restructuring the transaction so that not more than 4 legal owners are detailed as the transferee and a bare trust is put in place. However, as Andrew mentions, that scenario is more likely as most would not convey land to more than 4 owners.