Deed of Trust - Son/Mother

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    Deed of Trust - Son/Mother

    Hi everyone,

    I am here for some legal advise specific to the taxation.

    I currently live in a one bed flat with my mother which I own and will be buying a new property with more rooms shortly. The idea is to rent out the one bed flat property. I am looking for a deed of trust stating, I'll be the sole owner of the property but 99% of rent will go to mother and 1% to me. Being a high tax payer it makes a logic solution and I want to help my mother financially

    What do I have to tell my solicitor to get this type of Deed? Do I submit form 17?

    Any advise will be helpful.

    Thanks
    ​​​​​​​Aarnav

    #2
    Why not make your mother the landlord of any tenancy agreement and you simply do the work?
    Your mother can then receive all of the income.

    There's no need for a landlord to be the property owner.
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

    Comment


      #3
      And form 17 is irrelevant here.

      Comment


        #4
        Thank you Jpkeates for the advice

        To make my mother a landlord, what do I need to do? Just tell the solicitors to make my mother as the landlord in the contract? Or do I need to open up a business account for her?

        Comment


          #5
          Whoever is named on the tenancy agreement as "the landlord" is the landlord, so that's all it takes (unless you're somewhere where a landlord needs to be licenced).
          If there's no written tenancy agreement, the landlord is the person to whom rent is paid.

          You don't need a separate account, although I have one because it keeps my business and personal transactions separate.
          Don't tell the bank it's a business account, though, just open another account - business accounts are usually chargeable.
          When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
          Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

          Comment


            #6
            Originally posted by jpkeates View Post
            Why not make your mother the landlord of any tenancy agreement and you simply do the work?
            Your mother can then receive all of the income.

            There's no need for a landlord to be the property owner.
            Is it really as simple as this to rearrange your tax affairs? No need for transfer of ownership or deeds of trust?

            Comment


              #7
              Originally posted by Kape65 View Post
              Is it really as simple as this to rearrange your tax affairs? No need for transfer of ownership or deeds of trust?
              I think it is in this case.
              Provided the money stays with the mother, the arrangement is legitimate.

              If the intent is a tax dodge, and the money will end up with the son, I don't think whatever arrangement is put in place would avoid HMRC challenge.

              When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
              Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

              Comment


                #8
                Originally posted by jpkeates View Post
                I think it is in this case.
                Provided the money stays with the mother, the arrangement is legitimate.

                If the intent is a tax dodge, and the money will end up with the son, I don't think whatever arrangement is put in place would avoid HMRC challenge.
                Yes the intent is to give her all the money for her well-being and nothing would be transferred to my account

                Comment


                  #9
                  Originally posted by Kape65 View Post

                  Is it really as simple as this to rearrange your tax affairs? No need for transfer of ownership or deeds of trust?
                  Do you reckon a deeds of trust will be needed or it can be done without it (as mentioned by Jpkeates)

                  Comment


                    #10
                    In which case I think the arrangement would be fine.
                    Your mother is named as the landlord, she gets all the rent, you're basically gifting her the use of the property.

                    A solicitor might suggest a trust, but I think that would be more complex and unnecessary.
                    Just make sure you ask why anything they suggest is actually necessary.
                    But get some proper advice, I'm confident but I'm not qualified to give legal advice.
                    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                    Comment


                      #11
                      Originally posted by jpkeates View Post
                      In which case I think the arrangement would be fine.
                      Your mother is named as the landlord, she gets all the rent, you're basically gifting her the use of the property.

                      A solicitor might suggest a trust, but I think that would be more complex and unnecessary.
                      Just make sure you ask why anything they suggest is actually necessary.
                      But get some proper advice, I'm confident but I'm not qualified to give legal advice.
                      Thank you - I’ll put both options forward to my solicitor I guess they’ll suggest the deed so that they can eek out more?

                      Comment


                        #12
                        Solicitors aren't meant to do that (although that's not foolproof!)
                        If they do recommend it, ask what they're trying to protect you from.

                        Often a trust is used to avoid IHT, but I don't think that's likely to be relevant in this case.
                        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                        Comment


                          #13
                          Is it really this easy and can the same apply to husband/wife finances? I've been trying to sort out my tax so my liability goes mainly to my wife but have had to lodge forms with the land registry about beneficial ownership, plus let the mortgage company know - which in some cases has lead to a new application. Surely I can't use up my wife's tax allowance just by naming her as landlord?

                          Comment


                            #14
                            Originally posted by Parchester View Post
                            Is it really this easy and can the same apply to husband/wife finances?
                            Yes, but no.

                            It's that easy in this specific case - a mother and son, only one of whom owns the property where the money is going to one of them,
                            It wouldn't apply to people in different relationships and/or who are joint owners of a property.

                            For a husband and wife who jointly own a property, a deed (or land registry change) and HMRC forms are required.
                            A mortgage also complicates things (and can lead to some SDLT arising).
                            When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                            Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                            Comment


                              #15
                              OK thanks.

                              Comment

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