Previous Property Placed Into A Trust

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    Pete Mc

    Hi all,

    I think I know the answer to this but just want to check what people think, if you’d be so kind.

    We have received a HB claim from an elderly lady who was an owner occupier at her previous address. It seems that the property was becoming too much for her but, rather than sell it, she has placed it into a trust for her grandson. She has then moved into rented accommodation and is looking to claim HB.

    There may be an element of deprivation here but I am not convinced that obtaining HB was the sole or main motive for doing this so I’m not going down that road. I just want to make sure that we actually do treat her as no longer owning this property as it is now in a family trust for her grandson.

    Any help appreciated.

    Peter Barker

    The legal term “owner” as defined in Reg 2 is only relevant to the question of liability to make payments (Regs 12 and 9).

    If she is still the legal owner, or one of the legal owners (depends whether she is a trustee herself) that in itself doesn’t prevent her from claiming HB for another property elsewhere. If you check the land registry you might find that legal ownership has been transferred to trustees, or you might find that she remains registered as the legal owner but now as trustee for the benefit of her grandson. Doesn’t matter – it’s the beneficial interest in the property we are concerned with here.

    The sole issue is capital. She no longer has the beneficial interest in the property – that belongs to the beneficiary under the trust. That just leaves the question whether she disposed of the beneficial interest in order to preserve / increase / obtain HB


    Not going to argue with PB but this type of issue is becoming very common these days as property rises in value. Give away your house which may be worth a fortune and then expect taxpayers to fund your rent and lifestyle. Morally wrong and one reason why the UK is reaching £3 trillion in debt. We now have nearly 9 million renters in the UK and they are paying huge amounts in Council Tax for one….many will never own a property.

    A classic case of deprivation but to avoid tax I suspect.

    Pete Mc

    Totally agree Peter (3 Peters on the same thread!) but the bar for deprivation of capital is so high that it’s very rare you can actually go down that road. She has totally deprived herself of that capital but, like you say, it’s for other reasons, not done so that she can claim HB or at least not primarily for that reason.

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