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Property ownership and trusts of land – requirements to register and exclusions

Under the Fifth Money Laundering Directive (5MLD), relevant trusts must be registered with HMRC using the Trust Registration Service unless they fall within one of the exclusions set out in Schedule 3A. 

In summary, relevant trusts include:

  • all express trusts; and/or
  • all trusts where tax become payable, even if the trust is not an express trust.

Property can be held in two different ways; as joint tenants whereby the property passes by survivorship to the co-owner(s) on death; or as tenants in common whereby each owner holds a share of the property which passes separately with their own estate on death either under the terms of their Will or under the intestacy rules.

For property to be held as tenants in common, an express trust for ownership is created to define the respective shares.  This can be set out within the Transfer Deed itself or in a separate Declaration of Trust.  These trusts fall within one of the exclusions as ‘co-ownership trusts’, as long as the trustees and beneficiaries are the same people.  For example, Jack and Jill purchase a property together but Jill has contributed more towards the deposit and so they decide to reflect this by holding the property as tenants in common in unequal shares, with Jack owning 40% and Jill owning 60%.  Jack and Jill are both the trustees and the beneficiaries of this trust and the registration exclusion therefore applies.

If, however, the trustees and beneficiaries are not the same people, the exclusion will not apply and the trust must be registered.  For example, Jill’s parent’s set up a trust to purchase a property for Jack and Jill.  Jill’s parents are the trustees but Jack and Jill are the beneficiaries.  This is no longer a co-ownership trust and the exclusion no longer applies – the trust must be registered with HMRC using the Trust Registration Service.

If you are currently purchasing a property or are unsure about the legal and beneficial ownership of your property and whether the TRS will apply, please contact your usual Wealth Preservation team member for advice.

This update is for general purposes and guidance only and does not constitute legal or professional advice. You should seek legal advice before relying on its content. This update relates to the prevailing circumstances at the date of its original publication and may not have been updated to reflect subsequent developments. If you have general queries about our updates, please email: mailinglists@greenwoods.co.uk




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      By completing and submitting this form, you consent to Greenwoods Legal LLP processing your personal data to provide you with the email update services you have selected and any other materials and information about our services that Greenwoods Legal LLP reasonably believes will be of interest to you. You are free to withdraw your consent at any time by emailing mailinglists@greenwoods.co.uk