This article first appeared in the Winter 2017 edition of our Cwtch Magazine. Please click on the thumbnail above to read it as it appeared in the magazine.
Cwtch speaks to local barrister, trust and property expert, Gareth Jones, to investigate the legalities in layman’s terms.
A property trust is essentially a promise or agreement for a chosen person or people (or company) called ‘trustees’ to look after a property on your behalf.
A 'settlor' – the property owner – will transfer some (or all) of their property to a trustee(s).
The trustee(s) will then hold that trust property for the benefit of the 'beneficiaries' named in the trust.
The ‘beneficiaries’ are the people who will ultimately own the property within the trust.
Gareth says: If you owns your own home plus some rental property, it’s worth seeking advice on whether a Trust would be beneficial for your particular circumstances.
They're often used for the purposes of inheritance planning. In these cases, the ‘settlors’ are most often the parents/grandparents, while the ‘beneficiaries’ are children, grandchildren or sometimes nephew/nieces
The 'trustees' are often fully-certified solicitors or accountants. That isn’t to say family members, friends or even your current bank can’t act as a trustee, but whoever you choose, you must ensure they understand their role and check for professional insurances where appropriate.
You’re asking your trustee to look after a large asset, so due diligence is required on all fronts.
If the assets you leave will be less than £325,000, there won’t be any inheritance tax due.
If, however, you’re a landlord who owns your own home plus some rental property, it’s likely your assets will be more than this amount. In this situation, it’s worth seeking advice on whether a trust would be beneficial for your particular circumstances. They may benefit from the reduced tax rates for assets within a trust. And it isn’t just property; assets of any kind can be placed in trust with the same advantages.
A trust is a way of managing assets (money, investments, land or buildings) for people. There are different types of trusts and they are taxed differently.
Trusts are set up for a number of reasons, including:
Gareth Jones is a qualified barrister with over 25 years' experience specialising in wills, trusts and property law.
To arrange a free introduction appointment with Gareth, please email your contact details to Eleanor.Richards@cpshomes.co.uk.