Can beneficial ownership be claimed without the paperwork?

by Readers Question

8:55 AM, 13th February 2020
About 5 months ago

Can beneficial ownership be claimed without the paperwork?

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Can beneficial ownership be claimed without the paperwork?

I have a friend who bought a property 11 years ago, but had to add his mother to the deeds and the mortgage to be able to get the mortgage amount needed.

The plan was, or should have been, to hold the property as tenants in common with his mum only owning 1%. However, from the TR1 form completed by the solicitor it says tenants in common in equal shares. My friend now wants to remove his mum, but this could cause a CGT liability for his mum as the property has gone up in value by about £115k (minimal stamp duty as outstanding mortgage £100k and no other payment being made)

I don’t not think a separate declaration of trust was done and the solicitor says the paperwork has now been destroyed

So my question is can he claim beneficial ownership as he has lived there all the time and his mum lives elsewhere in which case will there be no CGT to pay if he removes his mum from the deeds or sells the property.

Many thanks

Victor



Comments

James Masters

10:07 AM, 13th February 2020
About 5 months ago

I'm just doing one at the moment and I've been told it is from the date the declaration or deed is notified to HMRC and takes effect going forward and it definitely can't be backdated.

Victor

10:46 AM, 13th February 2020
About 5 months ago

So I assume the only way of getting out of the CGT is to declaration of trust it back to the son in bits each year to use up his mum's annual CGT allowance

Mark Smith (Barrister-At-Law)

12:30 PM, 13th February 2020
About 5 months ago

A deed or declaration of trust cannot be backdated BUT if there is evidence that a bare trust was intended to be effective from a date earlier than the date of execution then it will run effective from that earlier date.

Chris Bradley

23:31 PM, 13th February 2020
About 5 months ago

Reply to the comment left by Victor at 13/02/2020 - 10:46
Interested to know if CGT is applicable. If the shares are gifted. - - mum gifts 49% to son. If 49% is over £40k then stamp duty could apply, but would CGT apply as mum didn't recieve any capital. Although inheritance tax could apply for 7years on the value of gift depending on value of estate.

michaelwgroves

10:29 AM, 19th February 2020
About 5 months ago

I had a similar issue. My wife an I own 99/1%
I called the LR and asked what I need to do to change. They advised they do not hold information on trust deeds. Just that there is one.
So if you can find the original and it is signed by both parties and witnessed, this should be fine. 😉

Joyjoy

8:32 AM, 22nd February 2020
About 5 months ago

Reply to the comment left by michaelwgroves at 19/02/2020 - 10:29
Does the DofT definitely have to be witnessed?

Joyjoy

12:20 PM, 23rd February 2020
About 5 months ago

Reply to the comment left by michaelwgroves at 22/02/2020 - 22:06
Thank you very much.

My DofT and the Will were all made and signed for by my Father and I.

The Solicitors’ 2 secretaries came in and witnessed and signed the document (which we thought was one).

Now it’s classed, the Will was the only witnessed document, the will which was changed after 14 yrs, by an 85 yr old, unwell, highly medicated, disabled, housebound, illiterate old man who decides (or coerced)😐 that he wants to gift a property away, that he knew he never even owned, but Solicitor states he knew what he was doing.


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