Query – would this be treated as capital asset?

Currently, there are 0 users and 1 guest visiting this topic.
Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
    Posts
  • #31602
    Paul Duggan
    Participant

    We have a scenario where claimant, Mr A, is a transferee for a property transferred into his name, by his mother.

    The land registry documentation states that the property transfer is not for monetary value, with full title guarantee, and he is to hold the property on trust, “as trustees of the (Mr A’s mother) family settlement dated xxxxx”

    A recent land registry search indicates that Mr A is the proprietor of the property. Mr A is of working age, is this property classed as a capital asset for benefit purposes, if there is no outstanding mortgage?

    Many thanks

    #41210
    Nicky
    Participant

    The imporatnt issue is not who the legal owner is, but who the beneficial owner of the property is.

    I don’t think that can be established without seeing the terms in any trust document and as a starting point I would ask to see that.

    #88330
    gary_t
    Participant

    My understanding of this is that, where there is an elderly relative who gives a property (i.e. transfers the legal estate) to one of their children but continues to live in the property, the courts would regard it as a constructive trust with the parent as equitable/beneficial owner – unless there is compelling evidence to the contrary. (I think this is a construction courts put on this situation to prevent offspring taking advantage of their elderly parents, and kicking them out of their home.) The existence of a trust creates a fiduciary duty of the trustee to the beneficiary in that the property must be held for the sole benefit of the beneficiary. In other words, you don’t necessarily need a trust instrument.

Viewing 3 posts - 1 through 3 (of 3 total)
  • You must be logged in to reply to this topic.