"Peter Crosland" wrote Thats sounds very unwise to say the least. By doing
this you are almost
Post by Peter Croslandcertainly in breach of your mortage agreement and potentailly it could be
seen as deception or fraud. The bank would certainly be justified in
foreclosing. Then there are the potential tax liabilties as well.
I take your concerns, but I have not explained the full story.
The house is registered as tenants in common with myself and my wife and is
mortgaged (myself and my late father had signed personal guarantees in
addition to the mortgage charge). Our private discretionary trust deed
states the actual ownership position that my late father's estate holds 1/3
whereas my wife and I hold 1/3 each. My wife and I are both trustees of his
trust formed by my father's will. The bank have no interest in knowing we
hold the house in trust for ourselves and our children as they have a charge
and are properly protected. This year we are breaking the trust and
distributing the assets to the children. There are no tax implications
because the children's share passes through the trust at the base cost it
entered into the trust 10 years ago. There is no formal way of rearranging
title ownership other than a TR1 transfer as this would require mortgagees
consent as they hold a restriction in addition to their charge. By the way
HMLR told me you can TR1 Transfer a mortgaged property without mortgagees
consent if there is no restriction recorded as the charge remains intact -
this practise is not normally done as the new owners end up with the old
charge on their title. In our case there is no need to anything because my
wife and I as tenants in common can continue as trustees to hold the house
on behalf of all the interested parties since the trust is a private
document. The land registry do not seem to want to get involved in
recording percentages of ownership but only need to know a trust exists. We
are wanting to record the fact that something has happened in case our
children do not remember to look for the trust deed after our death. The
AN1 Agreed Notice is simply a method of recording publicly that people other
than the registered proprietors have an interest in the house. The
mortgagees will get a copy of the notice from HMLR but it will not
jeopardise their charge interest as it is of higher priority than the other
parties concerned - it will be meaningless to them. They know nothing of
our private trust arrangements that are purely for inheritance tax purposes
and do not affect their interest. I think this clarifies the position that
we are not attempting fraud. There seems to be no way of recording trust
details on a land registry title. In fact the percentage of ownership never
seems to get recorded and is perhaps best left off the title as it can prove
more flexible if left to the discretion of those who may inherit later.
Others may wish to comment
Graham Brooker