Postby someone » Fri Jul 07, 2017 5:00 pm
I really think you need to seek professional advice. There's a whole heap of trouble you could get into - not least it's possible you've given the property to the "trustees" and anything *you* try to do with it now could potentially be seen a fraud as they now own it and have to decide what to do with it. In particular, any trust you create after the transfer to the "trustees" could be ineffective and, years down the line, see your intended beneficiaries being sued by the "trustees" next of kin for return of their inheritance.
I recall reading something in a legal forum where the fishing rights on some land had been sold and then the land had been sold. Due to various mixups, the sale of the land didn't explicitly exclude the fishing rights. Everyone had been happy for years and years until it came to light that HMLR had no record of the fishing rights and now refused to register them separately for B because it couldn't be proved that A had transferred them to B before A had done the transfer of everything to C. If A->B happened first then C didn't get the fishing rights as A wasn't in a position to sell them to C. If A->C happened first then B didn't get the fishing rights as again, A wasn't in a position to sell them. All the contracts would have been OK in themselves but B was now faced with an uphill task (and presumably expensive and not guaranteed) proving that he owned what he paid for.
I guess what some of the others are alluding to is that it's possible the trustees are holding it as nominee for yourself in a bare trust. I have no idea if that's possible unless there's a trust documented. I also have no idea whether your verbal agreement would be binding on the trustee in that case. But, if there is a bare trust, and if your verbal agreement isn't binding then it might be possible to stop everything at this point in which case, my guess is you won't have crystalized your capital gains yet.
But whatever happens next, you've got a legal mess to sort out. HMRC may demand CGT from you. Your intended beneficiaries may have a claim against you for carelessly losing a promised gift. The person or people you've transferred it to may not be in a position or willing to honour your wishes. And unless you get something rock solid sorted out now, there's a good chance that people might start fighting over it after you are dead when you aren't around to explain what your intentions were and the mixup comes to light.
At this point I have no idea whether you need an accountant or a lawyer, or possibly both.
Worst case is that you've lost everything and have CGT to pay. It sounds like the "trustee" is willing to work with you to sort this out so, actually, if you get advice and sort it out now, I think worst case is that you can't avoid the CGT (unless the trustee is bankrupt or something like that) but you can get the property to where it was intended.
Best case is that it is actually possible to unwind this in a way that gets you back to where you were without triggering CGT. But if that is possible, then it's going to have to be done in a way that stands up to HMRC scrutiny. If it isn't possible then there's nothing you can do and, IMO, trying to sweep it under the carpet now is likely to make things worse in the future.
FWIW, I have taken preliminary advice on transferring a property into a bare trust without changing the beneficial owner (nothing to do with tax - voting rights are capped in the management company and the share is held by the legal owner so it is a way to own multiple flats but retain all the votes) and I was told that it was possible and would not trigger a CGT charge regardless of whether the trustee was a connected person or not. I haven't actually tried to do it yet, and my circumstances aren't yet in the situation where it makes sense to do it, so I have no idea what is actually involved - and I'd want a written confirmation on the CGT side once I've got all the facts rather than just a "yes, it's certainly possible"
