I appreciate that everyone must be fed up of questions regarding TRS, so sorry for raising another one. First of all, I do not deal with the mechanics of registration as we use a firm of accountants to imput the details. Until now, I have not had to consider what is needed in relation to registering a non-taxable co-ownership property, trust. In this case, A and B Held their property as tenants in common. A has died And in his will has given B a life interest in his share and following her death, it passes to 2 children and a number of grandchildren.
B. and the two children are the trustees of the Will, and the Will trust, which is also non- taxable has already been registered. The property is to be transferred by the survivor, into the names of the trustees but the documentation has not been signed or submitted to HMLR yet.
It is over 90 days since A died. Therefore should B register the trust now showing herself as the sole trustee, and once the transfer has been lodged with HMLR, update the Trust details to show that the two children are additional trustees of the co-ownership property trust. Really it would be more practical to wait until the two children were on the title And then register it.
As regards details to be included when registering, I presume the Name of the trust should be A (deceased) and B co-ownership, property, trust. And the date the trust was created would’ve been the date the property was purchased or, if done later, the date the severance Into tenancy in common was signed/ registered. As regards beneficiaries, presumably they are the same as were included in the registration of the Will Trust.
Sorry if I am boring everyone, but I’m sure there are some of you who will be able to give me some help here And hopefully add to it.
Yes Richard, but that I understand is only for Registering the will trust. For the property trust (Co-ownership) TRSM 23020 on page 7 says registration is required at 90 days after the first one’s death!
Strictly the co-ownership trust became registrable as a non-taxable trust when it ceased to be excluded as a result of A’s death if the correct view is that the trustees and the beneficial owners then ceased to be the same persons. A’s equitable interest definitely left him then but does not pass to the will trust until the Admin Period ends or it is assented to the will trustees by his PRs (which the OP does not identify).
As you indicate it is much more likely that this will be transferred with the legal title when that is vested by a TR1 in the 2 children and the survivor. You have registered the will trust but the property trust will require a separate registration, as only half of the equitable interest is in the will trust.
Even if the TR1 is executed more than 90 days after A’s death I cannot see HMRC arguing the wholly unmeritorious point that it is late. It is usually a good contrary argument that the AP did not end until the TR1 was executed, as long as it is not delayed excessively.
So the new trustees of the registrable trust could not be properly described as being the trustees of the property before execution of the TR1 because until then neither equitable or legal title was vested in them. As a matter of pure law a trustee may assume the office of trustee before the trust property is vested in him but not where his appointment, which depends on acceptance, has to be evidenced otherwise than by his signing a trust document. The likelihood of HMRC grasping this subtlety is vanishingly small.
It sounds like the children have accepted office under the will trust but will not do so under the property trust before the TR1 is executed by B upon whom the entire legal but not the entire equitable title devolves by survivorship. As A and B were tics there should be no form A restriction.
The fact that B has an IPDI for IHT has no bearing on the matter save that the will trust was separately registrable and has been so registered and would have been if it had been a RPT.
I should have added that while B becomes the sole legal owner as a matter of general land law HMLR will require a Form DJP to remove A’s name from the proprietorship register as a feature of the law of land registration.