Transferring deeds into joint names

Reply to the comment left by "Andy 46" at "20/03/2015 - 12:06":

A Will?
.

Reply to the comment left by "Mark Bennett" at "20/03/2015 - 12:39":

Hi Mark

Utilising a Declaration of Trust to specify the ownership of beneficial interests in a property is completely different to transferring the ownership of a property into trust.
.

Reply to the comment left by "Mark Alexander" at "20/03/2015 - 12:48":

The PO states that the objective of joint names is to split the tax bill. Therefore, do HMRC recognise a beneficial intertest as being a taxable interest? I would suspect the answer is no which means the tax planning would fail.

Reply to the comment left by "Mark Bennett" at "20/03/2015 - 12:56":

The legal advice provided by our recommended and highly experienced solicitor is fully insured by his Professional Indemnity insurance policy to provide the necessary advice. If he is wrong (which I consider to be highly unlikely) then his insurance will make good any losses.
.

Reply to the comment left by "Mark Alexander" at "20/03/2015 - 13:01":

Far easier for the PO to check with HMRC. They're very helpful and the advice is free. I still maintain that "beneficial interest" is not legal title / ownership. It is the latter that creates the tax liability. The former may be fine for a none income generating asset but not for an investment property.

Reply to the comment left by "Mark Bennett" at "20/03/2015 - 13:28":

Are you qualified in this area Mark?

I agree that HMRC try to be very helpful when you call them but knowing the right questions to ask is just as important as the answers. Also note that HMRC staff are notoriously poor when it comes to providing accurate verbal advice. There are several discussions here at Property118 evidencing this.

I agree that legal title and beneficial interest are two different things, however, I think you have managed to confuse yourself with regards to the core principles being discussed here.
.

Reply to the comment left by "Mark Alexander" at "20/03/2015 - 14:04":

Retired IFA. And not confused about anything.

Reply to the comment left by "Mark Bennett" at "20/03/2015 - 14:39":

LOL, me too!

Retired in 2009 having taken my commercial mortgage brokerage to #38 in The Sunday Times Profit Track 100 >>> http://goo.gl/s1EX3e

I was also a founder Director of the National Association of Commercial Finance Brokers.

The key point here is that as retired advisers we are not offering advice, nor are we regulated or insured to do so. We can, of course, still refer people to contacts we've made along the way, which IS the case here.
.

Reply to the comment left by "Mark Bennett" at "20/03/2015 - 14:39":

Perhaps this might help .....

A declaration of trust (in writing) is a binding statement by the legal owner of an asset, declaring the underlying beneficial interests of the person or persons for whose benefit he holds the legal title. Joint legal owners of an asset may also declare the trusts on which they hold an asset either for themselves or for others beneficially. This helps to avoid future misunderstandings concerning the obligations of the legal owner and the entitlements of those beneficially interested.

The following examples illustrate some circumstances in which a declaration of trust could be used:

Jill and Janet buy a house, with both names registered on the legal title. As Jill provides a larger share of the purchase price, they intend for her to take a larger share in the equity. Their declaration of trust states that they hold the legal title on trust for themselves beneficially in proportion to their contributions to the purchase price.

Dr Brown sets up practice with five other partners each of whom contribute equally towards the purchase price of their surgery. Because it is not possible to have more than four names on the legal title at the Land Registry, the declaration of trust states that four legal owners hold the title for all six partners beneficially (i.e. as beneficial tenants in common), in equal shares.

In each example above, the declarations of trust simply set out the existing beneficial interests in the property, with no element of gift.

Romeo and Juliet buy an apartment together. Juliet provides all the deposit and Romeo will fund the mortgage. They intend to own the property equally and a declaration of trust states that they hold the legal title for themselves as beneficial tenants in common. As far as the inheritance tax consequences are concerned, Romeo’s mortgage payments are effectively a gift of half of each payment to Juliet. These regular gifts may qualify as normal expenditure out of income under section 21. Half of each mortgage payment (representing the gift) made after their intended marriage will in any case be spouse exempt. Half of Juliet’s contribution (a gift to Romeo, increasing his interest) will be a potentially exempt transfer (PET), within section 3A.

Lady Macbeth signs a declaration of trust stating that she is holding her Picasso painting on bare trust for her two cousins in equal shares. This is an outright gift by her. She is then advised, however, that this gift is caught by the gift with reservation rules (FA 1986 section 102). She flies into a rage, but she is bound by the declaration which is effective to transfer the beneficial ownership to her cousins.

In Examples 3 and 4, the gifts have potential inheritance tax consequences as there is a transfer of value in each case. Lady Macbeth’s gift will also be a disposal for capital gains tax, as the gift is of an asset and not cash.

Source >>> http://www.step.org/declaration-trust
.

Contact the Land Registry office they are very helpful, all papers can be downloaded from the website, but they are happy to post out. Cost is around 40.00 usual security checks ie passport need to be produced photos etc and papers signed by solicitor if not attending in person ( ours was a bit miffed that we had done it ourselves but after his 50.00 charge for signing still cheaper than the 350.00 he quoted. Also whether to hold title as Joint Tenant or Tenants in common which ever is the most beneficial to you, as we were advised if either of us needed Care in old age they can't make you sell the property if you only own half. Hope this helps.