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Where Taxpayers and Advisers Meet

Can declaration of trust change Trust deed

mobile
Posts: 12
Joined: Tue Dec 13, 2016 9:43 am

Can declaration of trust change Trust deed

Postby mobile » Wed Nov 07, 2018 1:13 pm

Hi

What is the difference between a trust deed and declaration of trust? It seems online and many solicitors view the terms interchangeably.

Years ago my parents and I executed what we thought was a declaration of trust confirming our respective shares in our home (20% me 80% parents)- all 3 of us are on the title register. As time passed my parents and I agreed to have a different split (50:50) which involved them gifting me part of their share. We created our own document and signed it confirming the house was held 50:50.

I asked for advice from this board and the general consensus was that a written declaration signed by all 3 parties would be sufficient if ownership was ever challenged by HMRC or the council.

I looked at the original declaration of trust we signed years ago and it turns out that its not a declaration of trust but a trust deed. Despite having 'declaration of trust' as the title the document also says 'signed as a deed and delivered' which then makes it a trust deed? It seems we originally signed a trust deed and on amending our shares we signed a declaration of trust.

I have spoken to solicitors who have offered differing advice about what to do to reflect the new ownership. One has said a new trust deed will need to be drawn up to change the ownership to (50:50) and this would effectively mean the ownership will change to 50:50 only when we sign the trust deed he produces. This would mean the 7 years gift rule will start and it would appear that the ownership changed in 2018 which isn't the case. Another has said I cannot undo the previous trust deed.

What should I be doing to ensure our split is 50:50 and is effective from when we changed ownership to 50:50.

Does anyone know of a lawyer / solicitor that could advise on what the best steps are going to be.

https://www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estates-manual/tsem9520 and https://www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estates-manual/tsem9530

AGoodman
Posts: 521
Joined: Fri May 16, 2014 3:47 pm

Re: Can declaration of trust change Trust deed

Postby AGoodman » Wed Nov 07, 2018 4:14 pm

A declaration of trust is always a trust deed, a trust deed isn’t necessarily a declaration. In the context you’re talking about, they mean the same thing.

A deed needs to state that it is a deed (as yours does) and be signed by all parties with witnesses.

From what you’ve said, it all sounds fine but I am always nervous about homemade documents (homemade wills are a godsend for lawyers!). I have seen too many horrible mistakes.

It is worth instructing a solicitor properly and giving them the documents to review to check them.


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