Hi - a father is setting up a discretionary trust with adult children/their issue as potential beneficiaries. Trust is to loan funds (interest free) to one of father’s daughters to assist in property purchase. If trust secures loan by way of a charge (CH1) at land registry can this fall into regulated mortgage provisions? A conveyancing colleague has flagged this.
Thank you in advance.
Philippa Torkington
Gunnercooke
Provided the arrangement is a “one-off” and the trustees are not intending to undertake any regulated business activities, I do not believe the arrangement would be a regulated activity.
This was an issue we had to consider when I was working for a trust corporation, whose parent was a regulated lender, and it was accepted that occasional lending from individual trusts to beneficiaries of those trusts was not a regulated activity.
However, probably a question best referred to your firm’s compliance manager.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals