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plclegal
plclegal, Barrister
Category: Law
Satisfied Customers: 8543
Experience:  Barrister at law
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My wife and I purchased two buy-let-properties a few years

Customer Question

Hi
My wife and I purchased two buy-let-properties a few years ago as investment properties. At, the time of purchase, we entered into a Declaration of Trust deed in respect of each property transferring the legal and beneficial title to my wife. This was for tax purposes. Since then, a change in circumstances means there is no longer a material tax benefit and we would like to cancel both Declaration of Trust deeds in order to return to joint (50/50) legal and beneficial ownership. Are you able to assist with a form of words to effect this change? Thanks.
JA: Where are you? It matters because laws vary by location.
Customer: England
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Customer: none
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Customer: Nothing else.
Submitted: 14 days ago.
Category: Law
Expert:  plclegal replied 14 days ago.

Good afternoon.

My name is ***** ***** I specialise in family law. I’m happy to assist you today and I appreciate that is is important that you find a resolution as soon as possible.

Please note that our discussions on this site are for general information purposes and do not create an lawyer-client relationship. It is always recommended that you consult with a local solicitor for specific legal information.

I'll do my best to resolve this for you, please give me time to review your question and I will revert back to you shortly.

Please bear in mind though that this is an email service and not live chat and therefore I may not respond immediately.

Customer: replied 14 days ago.
Ok. Thanks
Expert:  plclegal replied 14 days ago.

How a trust can be dissolved will depend on the trust in question. Some trusts will be terminated by the occurrence of a particular event (for example, on the death of a beneficiary or when they come of age) whereas others will be terminated by the actions of the trustees or beneficiaries.

Whichever way the trust is ended, the trustees should make sure they have a record of its termination, either as a trustee resolution or a formal deed, depending on the terms of the settlement. It may be possible to simply record the decision in writing, or it may have to be actioned by a deed to be valid.

HMRC should also be notified of the trust being closed if the trust has been filing UK tax returns. HMRC will then remove the trust from their system. This will ensure that the trustees are not liable for any issues or costs that arise in future. Failure to notify HMRC can result in penalties for either late or non-filing of tax returns. Trustees have a claim over trust assets to make sure that their right to be indemnified is protected. This right includes the right to reimbursement, exoneration, retention and realisation over the assets to ensure the administration or future liabilities of the trust are covered.

There are various factors that the trustees should consider in this case. It is advisable that trustees record when a beneficiary will become entitled to trust assets to make sure they have allowed time to plan for the trust ending and the various implications. The trustees should make sure that they are aware which beneficiaries will receive the trust’s assets, whether there are any tax implications from the trust ending and if they should actually be preventing the trust from ending.

When a trust is terminated, the trustees must ensure that all trust assets are given to the correct beneficiaries. If they do not do this, they could be guilty of breaching the trust. Before distributing the trust property, the trustees must ensure they have made all reasonable attempts to check if there has been any change to the beneficiaries and what they are entitled to. They should also advertise any relevant persons and if they are not sure if the beneficiary is alive, they need to apply to the court for an order. Finally, if they cannot identify all the beneficiaries, the trustees must pay the trust funds in court (but this is a last resort).

Before finally winding up a trust, the trustees must pay any outstanding debts and liabilities, as well as making sure they have identified all beneficiaries. They will then determine how much each beneficiary will be given and transfer ownership of these assets to the beneficiary. The final accounts for the trust will then need to be drawn up and will need to receive beneficiary approval before the trustee gets a release or discharge.

As to a specific form of words, it will depend on the wording of the trust itself. It's not a complex trust from the description you have given, but I would still suggest taking this to a trusts solicitor on the high street for a watertight solution rather than trying to concoct the wording yourself.

I trust (apologies for the use of the word!) that this assists?

Expert:  plclegal replied 14 days ago.

How a trust can be dissolved will depend on the trust in question. Some trusts will be terminated by the occurrence of a particular event (for example, on the death of a beneficiary or when they come of age) whereas others will be terminated by the actions of the trustees or beneficiaries.

Whichever way the trust is ended, the trustees should make sure they have a record of its termination, either as a trustee resolution or a formal deed, depending on the terms of the settlement. It may be possible to simply record the decision in writing, or it may have to be actioned by a deed to be valid.

HMRC should also be notified of the trust being closed if the trust has been filing UK tax returns. HMRC will then remove the trust from their system. This will ensure that the trustees are not liable for any issues or costs that arise in future. Failure to notify HMRC can result in penalties for either late or non-filing of tax returns. Trustees have a claim over trust assets to make sure that their right to be indemnified is protected. This right includes the right to reimbursement, exoneration, retention and realisation over the assets to ensure the administration or future liabilities of the trust are covered.

There are various factors that the trustees should consider in this case. It is advisable that trustees record when a beneficiary will become entitled to trust assets to make sure they have allowed time to plan for the trust ending and the various implications. The trustees should make sure that they are aware which beneficiaries will receive the trust’s assets, whether there are any tax implications from the trust ending and if they should actually be preventing the trust from ending.

When a trust is terminated, the trustees must ensure that all trust assets are given to the correct beneficiaries. If they do not do this, they could be guilty of breaching the trust. Before distributing the trust property, the trustees must ensure they have made all reasonable attempts to check if there has been any change to the beneficiaries and what they are entitled to. They should also advertise any relevant persons and if they are not sure if the beneficiary is alive, they need to apply to the court for an order. Finally, if they cannot identify all the beneficiaries, the trustees must pay the trust funds in court (but this is a last resort).

Before finally winding up a trust, the trustees must pay any outstanding debts and liabilities, as well as making sure they have identified all beneficiaries. They will then determine how much each beneficiary will be given and transfer ownership of these assets to the beneficiary. The final accounts for the trust will then need to be drawn up and will need to receive beneficiary approval before the trustee gets a release or discharge.

As to a specific form of words to effect the dissolution, this will depend on the wording of the trust itself. It does not sound like it is a complicated arrangement, but you would be advised to take this to a solicitor to have them draft the papers for you to ensure that everything is above board.

I trust (apologies for the use of the word!) that this assists?

Customer: replied 14 days ago.
Ok thanks. Would it be easier to simply draft another deed, similar to the first, but amending the beneficiaries to my wife and me equally, as opposed to just my wife (as in the current deed).
Expert:  plclegal replied 14 days ago.

Thanks for your patience, there have been some issues with us being able to access the site this afternoon as experts. Hopefully they are resolved now.

I would say that the simplest option is normally the best option. If the trust is no longer required, and there are no tax benefits to its existence, then simply dissolve it.

Thank you for your enquiry today. I am happy to answer follow-up questions - please do get in touch with requests for extra information or further queries and I will do my best to help you.

Expert:  plclegal replied 11 days ago.

Thank you again for visiting JustAnswer, please do let me know if you have any additional questions in the future. I am also happy to answer any new questions on other topics that you may have, you can request me by putting “for PLCLEGAL” at the start of the new thread. Best wishes, Peter