Marlborough Living Jan - Feb 2020

Bare Your Trusts Wealth,
Bare trusts are true to their name
and just deal with “bare”
essentials! Your The trustees hold Decision
the
trust property on behalf of the
beneficiary, Victoria it Iremonger, really is that simple. a paralegal at
Wansbroughs Solicitors in Devizes considers
the English Court’s commitment to upholding
The beneficiary owns the
Buying beneficial interest the Your property First
and they are entitled to income
it generates (if any) but they will
House testamentary Together
freedom...
not own the property outright until
they
Matthew
reach the
Life,
age of
Partner
18 years
within
of
Testamentary freedom is the concept that the you Residential
can, within your
age.
Will, Property leave your team wealth at Wansbroughs to whomever you Solicitors wish - whether explains by
outright
Bare trusts
provision
are often
or
used
by placing
by
assets into a trust.
grandparents what to consider to gift money if buying to their a home together...
grandchildren who are below the age of 18 years old and therefore
It The is an recent exciting case time of Cowan for any v young Foreman couple reaffirmed to be buying the English
unable to receive such funds outright. In many instances, their first
home grandparents
Court’s together, commitment
may but open for to an interest-bearing
upholding unmarried testamentary or bank non-civil accounts
freedom partnership in their
couple grandchild/grandchildren’s
wherever it is possible, particularly by rejecting important names
Mrs
and that Cowan’s
then you consider transfer
application
money very carefully to
into that
how account receive you her – own either inheritance the larger property. one-off, in the form less frequent of outright sums legacies or more instead frequent of
through sums, i.e. the monthly trusts sums. set up The by Mr grandparents Cowan’s Will. can rest assured in this
instance Whenever that two they or retain more individuals control of the purchase funds as together, signatories there of the are
account two Under ways the while in terms which their of grandchildren the Mr property Cowan’s can Will, are minors. be he owned. made The Mrs The funds Cowan first can is be as a
called used beneficiary for ‘joint things of tenants’ two their trusts. grandchild the Since second may Mr Cowan’s require, is ‘tenants i.e. death, school in common’. the fees, trustees or
These school have been are trips. technical supporting The only legal stipulation his terms widow is but with that each large they has must monthly important benefit payments. the It
implications.
grandchild is however because reported although that Mrs grandparents Cowan was uncomfortable will remain in control with the of
arrangements, the funds, they actually feeling that belong she to was the “at grandchild. the mercy of the trustees”
If who When buyers could the decide grandchild cut her to adrift own attains a with property the no age access as of 18, joint to they money tenants, can at request they all’. are that the
trustees deemed transfer to each control own an of equal the trust share property of the and property, the income. regardless Bare
trustees
of Mrs whether Cowan must
one therefore bear
has
in
made
mind applied a
that
larger to if they contribution High consider Court 18
towards years vary old the the
to be
too
purchase distribution young for
price, of their her mortgage late grandchildren husband’s to
or other estate. inherit
household Ruling large sums
payments. against of money her, Also, the if
then
one
judge a
of
stated bare trust
them dies,
that may ‘there not
their share
is be absolutely suitable.
automatically
nothing
passes
in the
to
evidence
the other
to
owner.
It suggest is not
It
just that
makes
for the grandchildren
no
trustees
difference
would that
whether
blatantly bare trusts
they
defy
have
can the be
made
deceased’s created.
a Will
Bare
or
wishes’ trusts can
expressed
and be ‘it created
other
must
wishes,
be in Wills possible or when
because
for the trustees
as joint
testator of a
tenants
to pension provide scheme
they have
for his
transfer
‘connected’
widow by a lump a generous sum death
interests.
trust benefit, arrangement to name such just as a couple this, without of the
examples. fear that it They will be do interfered not have to with contain at huge cash expense and can, in for proceedings example,
contain
For
under
many
the shares
couples
1975 or Act.’ property. There can be more than one beneficiary
of a bare trust (i.e. your
buying
grandchildren
their first house
as a class).
together,
All in
they
all,
will
they can
either be be putting in unequal money from the start, or wish to
‘ring-fence’
As
very
highlighted
flexible
their
in
in
own
the
terms
Cowan
of what
financial
case,
they
interests
as
contain,
long
in the
as
who
trustees
the trustees
house. In
act
which
in
are
case,
a
and
reasonable
who the beneficiaries
owning
manner
as tenants
and
are.
in
in
common
accordance
They can be
is more
with
set up
appropriate.
your
by
wishes,
anyone, not
just family members for the benefit of other family members.
there is little reason to overturn a trust arrangement. It should
For
With
however both capital
tenants
be noted gains
in common,
that tax Mrs and
each
Cowan inheritance
individual
has indicated tax purposes,
owns a separate
her intention the
beneficiary
and
to appeal
distinct
the
is treated
portion
judgment
as the
of the
so
value
while,
beneficial
of
for
the
now,
owner
property.
the
of any
Courts
property
If one
appear
which
of the
to
is held in the bare trust, not the trustees. The transfer by the
owners
be upholding
dies, his
this
or
concept,
her share
it remains
does not
to
then
be seen
pass
whether
automatically
Mrs
individual, whoever that may be, into the trust is a gift for inheritance
to
Cowan
the other
will persuade
owner, but
them
to whoever
to alter the
is nominated
means of her
in their
inheritance.
tax purposes but no inheritance tax charge will arise immediately Will.
and With if tenants the individual common, gifting into it is also the trust possible survives to own for seven the house year from
the in
To
separate
find
date
out
of the
more
shares gift
about
then (i.e 40% no
making
inheritance and
a
60%),
Will
tax
and
and will
other
to be have payable
estate
a detailed
planning,
at all.
Declaration Capital please get gains in
of tax touch
Trust might with
which arise your
can on usual
cover a transfer contact
all manner into at the Wansbroughs
of trust additional if the asset or
arrangements. is contact not cash. us on Therefore 01380
For instance,
733 a gift 399 into a
or a common
via bank email account wish
at
is in to cash protect would one not
wealth@wansbroughs.com.
buyer’s trigger a larger charge initial to capital cash contribution, gains tax. so that on any sale this will
be Once paid funds back are to in them bare first, trust, before capital the remaining gains tax, equity if payable, is shared. is
payable
By Victoria Iremonger
Or, in case by the things beneficiary do not go but to they plan, are provisions entitled to can their be individual included
annual to allow exemption one owner of to £11,100 buy Paralegal out and the - similarly, Private other. Client income tax will be
payable by the beneficiary.
Wansbroughs Solicitors
So Bare plenty trusts to have think many about other when potential buying uses a property which you jointly! can discuss
with us should you think Devizes: this might 01380 be of interest 733300to you.
If you have would any like questions, to consider Melksham: please any contact of 01225 this in the 896100 more highly detail experienced please
Residential contact Wansbroughs Property team wealth@wansbroughs.com
in Devizes at Wansbroughs on 01380 Solicitors 733300, email and they
wealth@wansbroughs.com would be happy to help. www.wansbroughs.com
or your usual contact.
Devizes Office
Northgate House, Northgate
Street, Devizes SN10 1JX
Tel: 01380 733300
Email: mail@wansbroughs.com
www.wansbroughs.com
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Tel: 01225 896100
E: melksham@wansbroughs.com
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