Trusts of land

Trusts of Land and Appointment of Trustees Act 1996

The Trusts of Land and Appointment of Trustees Act 1996 (TOLATA 1996) came into force on 1 January 1997. Under it the:

  1. trust for sale is replaced by the trust of land

  2. doctrine of conversion is abolished

  3. trustees and the beneficiaries are given additional powers and rights in relation to the trust property

  4. court is given enhanced powers to make orders in relation to the trust

  5. beneficiaries are given powers to remove and appoint new trustees

See Practice Note: Trusts of Land and Appointment of Trustees Act 1996.

Trusts of land—preliminary issues

Under the provisions of TOLATA 1996, s 14 the court is able to make orders:

  1. relating to the exercise by the trustees of any of their functions including an order relieving them of any obligation to obtain the consent of or consult with any person in connection with the exercise of any of their functions, or

  2. declaring the nature or extent of a person's interest in property subject to the trust

While TOLATA

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All in? Court confirms when a settlement is 'made' for the purposes of excluded property (Accuro Trust (Switzerland) SA v The Commissioners for HMRC)

Private Client analysis: This case considered the meaning of 'relevant property' under the settlements regime of the Inheritance Tax Act 1984 (IHTA 1984) and, in particular, the time at which this definition is to be tested. The question arose as to whether the trustees of an offshore trust established by a non-UK domiciled settlor were subject to the UK settlements regime in respect of property added to the trust after the settlor became deemed domiciled in the UK, or whether they were exempt from such charges as the trust consisted solely of excluded property. The First-tier Tribunal (FTT) held that whether trust property is excluded property is based on the status of the trust at the time that it was established, not at the time that the property in question was added to the settlement. As a result, the trust in this case did consist solely of excluded property and no inheritance tax (IHT) charges arose as a result of either the ten-year anniversary or capital distributions. The FTT was also asked to consider whether their jurisdiction was appellate, or supervisory only. The FTT held that, while their jurisdiction was supervisory, the questions raised by the trustees were relevant in establishing whether HMRC had acted reasonably and that the outcome (ie that the paid IHT should be refunded and that no further IHT was due) would be the same in either case. Written by Katherine Willmott, senior associate solicitor at Foot Anstey LLP.

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