Can declaration of trust change Trust deed
Posted: 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
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