It seems that the the Will created two distinct trusts, one over the property and another over an amount equal to the NRB to which an interest in a second property was appropriated and the balance being a loan to the survivor. So both must be registered subject to the 2 year point as to timing but many will indeed register earlier anyway if that period is certain to be exceeded.
There are some confusing aspects to the question.
1 Did the husband own only the entire residence or just 50%? If the latter the separate DOT is merely declaratory of the legal position. Who declared the trust? If the trustees and the beneficiaries are not co-terminous you apparently have a third trust to register because it is not excluded if (and while) non-taxable.
If he owned the entire house then the DOT had a substantive effect of transferring 50 % to the survivor which would have had to be done by the Will trustees exercising a power in the Will trust. The answer would still be the same nonetheless.
2 I don’t follow how the “deceased’s interest” in the second property then becomes held by the trustees 100% for the surviving spouse. Is that 100% of the part interest appropriated to the will trust or 100% of the entirety? Who declared the trust? Again, if the trustees and beneficiaries are not identical, and even if the DOT is only declaratory of the legal position, it is separately registrable because it is not excluded if (and while) non-taxable.
If the legal title to each property becomes registered so that the trustees holding the registered legal title and the beneficiaries of each trust are identical (the quantum of their underlying equitable interests need not be equal) then if and while the DOT trusts remain like that and are not taxable they would be excluded from registration. There may of course be a gap before the legal title at HMLR is actually altered but as long as it eventually reflects the terms of the DOT and those justify exclusion the fact that arguably there is such an inevitable gap (it could be long given the HMLR backlog!) does not matter. You definitely create a requirement to register if the registered title when finally changed is not in the name of all the trustees of the DOT who are “beneficiaries”.
Trustees constitute “beneficiaries” of the property trust for this purpose even if their equitable interest is itself held on trust.
So you seem to have 2 Will trusts to register and possibly 2 DOT trusts unless they are excluded.
Jack Harper
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| GamerGirlxxx Anonymous
21 April |
I have a situation where the deceased husband created a Will Trust over the main residence. We have prepared a Declaration of Trust stating that the surviving spouse and the trustees of the Will Trust hold the property as to 50% under the Will Trust, with the remaining 50% held by the surviving spouse.
Whilst a Will Trust is exempt from registration within two years of death, our firm’s practice is always to register it where it is being set up against a property. Therefore, the Will Trust is always registered.
In the same matter, the deceased also left a Nil Rate Band Trust, with the trustees loaning the full available Nil Rate Band amount to the surviving spouse. Part of the deceased’s interest in a second property was settled into the trust, with a loan agreement executed and a Declaration of Trust prepared over the property, stating that the trustees hold 100% for the surviving spouse, subject to the loan agreement.
I am unsure whether these two Declarations of Trust require separate registrations. I would like to know how other practitioners have been dealing with this in practice.
Note: In this case, the surviving spouse is not a trustee of the Will Trust but remains on the legal title of the said two properties.