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Buachaill, Barrister
Category: Law
Satisfied Customers: 10953
Experience:  Barrister 17 years experience
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What is the difference between a Bare Trust, and a Trust for

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What is the difference between a Bare Trust, and a Trust for Sale/trust of Land? The legislation, particularly around the abilities/rights of the Trustees, seems to be conradictory?

1. Dear *****, the difference between a bare trust, such as awhere a solicitor holds monies for a client and a trust for sale or a trust of land, such as a family settlement is that a bare trust has no positive duties of management and allocation of funds which a trust for sale or a trust of land has. Essentially, they are two very different species of animal.

2. A bare trust simply has an obligation to pay over the monies to the beneficiary of the bare trust. There are no duties of management or allocation of monies amongst beneficiaries. The lack of positive duties means that a bare trust is created whenever and whereever the law wants the fewest duties possible created.

3. A trust for sale or a trust of land, has positive duties of management and control of the rights of the potential beneficiaries amongst those beneficiaries. The trustees must, for example, invest any monies received. They must account to their beneficiary for what happens with the land or whatever is held on trust. Positive duties are owed to the beneficiaries which the beneficiaries may sue upon and enforce.

4. If you have a particular example you wish advice upon, I will be happy to help further. However, please Rate the answer as unless you Rate the answer your Expert will receive no payment for answering your question.

Customer: replied 1 year ago.
Thanks for you answer, which is as I had believed but I am not legally trained. With regard to your reply No 1, may I presume that for 'solicitor', it is correct to insert Trustee?

5. Dear *****, it is not correct that you insert "trustee" for solicitor in the reply No.1. I am giving you an example of a bare trust. The solicitor holds the monies as trustee. However, it is an example of a bare trust.

Customer: replied 1 year ago. me a bit confused here. But I shall ask the question from a different perspective.
I am a remainder man of a 'Life Interest trust'.
My father, who died in1969, left assets in trust for his children with his wife with 'life Interest'. She died in feb 2000 and I became an 'absolute owner' of a share of the this case some land. There have been Trustees since 1969, and since 2000 these trustees became 'Nominee trustees'.
However, a trust specialist from HMRC Trusts and Estates wrote that...'On the subsequent death of JWW (my father) in 1969 there appear to have been 'no express trusts', and only holding of the assets on a 'trust for sale' on behalf of the individual legatees by bare trustees'.
Surely my mother's 'Life Interest' governed by trustees is an 'Express Trust'?
The trust is Bare (***** ***** QC opinion 1996, confirmed in 2015 by him.) I don't understand why HMRC describe it as a 'trust for sale' with 'bare trustees'. Thus my primary question.

6. The trust is now a bare trust because the trustees merely have on obligation, namely to deliver up to you the assets which were the subject of the trust. Effectively, the trust objects have been performed so there is only a bare trust today. Secondly, all land is held in England & Wales on a trust for sale. This was the effect of the 1925 Land Law and Law of Trustees reforms. So, stating that your land is now held on a trust for sale is merely saying it is held in the usual way all land is held in the UK, namely on a trust for sale.

7. The first line should read the "trustees merely have one obligation.."

Customer: replied 1 year ago.
Many thanks...nearly there! HMRC were not informed of the 'Life Tenant' from 1969 to 2000. Would this 'tenancy' be regarded as an 'Express Trust'?

8. The overall arrangement was an express trust of which the life tenancy was only part of the express trust. The rest of the express trust was a conveyance to you absolutely.

Customer: replied 1 year ago.
Just digesting the information, will get back to you on monday. Many thanks

9. Take your time.

Buachaill and other Law Specialists are ready to help you
Customer: replied 1 year ago.
Been a very stressful week, with the matter in hand being part of larger 'legal' problem. Please can we keep this open 'til after the weekend. I think I ought to speak by phone at that time. Excellent job so far, thank you.

10. No problem

Customer: replied 1 year ago.
Hi again...incredibly busy over the last few days and into this week. Getting quite stressed by the 'legal' problems. Will arrange to speak on the phone towards the end of the week as a 'new question'. Very many thanks!

11. I do not provide a Live Phone Service, so you will have to get this service off a different Expert. However, I will do additional Question & Answer if you wish.