TSEM11000 - Glossary
A听B听C听D听E听F听G听H听I听J听L听M听N听O听P听R听S听T听U听V听W
皇冠体育app definitions of legal terms contained in this glossary do not generally apply in Scotland. Staff in HMRC Trusts Edinburgh will have access to alternative glossaries.
A
Abatement
Abatement is the proportional reduction of a legacy. It is necessary when an estate is insufficient to meet a legacy in full.
Absolute interest
Absolute interest is a full and complete interest in both income and capital. It can refer to the present or to the future when the interest vests.
Some old 鈥榬ulings鈥� given by trust deed examiners in Claims Branch, Bootle, refer to 鈥榓n absolute interest in income鈥�. This means the beneficiary is entitled to income, but not to capital.
An 鈥榓bsolute interest in residue鈥� is statutorily defined in ITTOIA/S650(1)
Absolute title
A certificate of ownership of land grants an absolute title to land. 皇冠体育app Land Registry issues the certificates.
皇冠体育appre are other certificates, which are less conclusive.
- Qualified certificate this applies where there is an interest that affects the ownership.
- Possessory title. This applies where it is not clear if another interest exists.
It is possible to register most legal estates or legal interests in land. This saves the expense of search fees on the sale of the land.
鈥楢bsolute title鈥� does not refer to all land ownership. It applies only to holders of a certificate of ownership.
Accumulation/discretionary trust
TSEM1112
Term used to describe a trust where income can either be accumulated or paid at discretion. Derived from rubic to S686 ICTA 1988 and heading of ITA/S479.
Accumulation and maintenance trust
TSEM1025
IHTA84/S71
Normally beneficiaries have an interest that is conditional on attaining a specific age not normally exceeding 25. But, by that age they must be certain of being entitled to the income arising. In other words, by that age they must have an interest in possession.
鈥楢ccumulation and maintenance trust鈥� is an inheritance tax term. Section 71 Inheritance Tax Act 1984 has a description of the term.
Accumulation of income
TSEM1125
Trusts can require that all income be accumulated until a certain time. 皇冠体育appy are known as trusts to accumulate. No beneficiary has title to the income.
More normally trustees will have discretion to apply income for the maintenance, education or benefit of a beneficiary with a requirement that they accumulate income not so used.
This is more usual where a minor is involved but can apply to an adult beneficiary.
皇冠体育app law limits the period during which income may be accumulated.
Accumulated income becomes capital in the hands of the trustees.
Ademption
皇冠体育app word refers to the failure of a legacy. It applies where the subject matter of the legacy
- has ceased to exist at the testator鈥檚 death, or
- has altered, so that it no longer exists in the form described in the will.
A legacy that fails for either reason, is adeemed.
Administration
鈥楢dministration鈥� refers to the duties of personal representatives of a deceased person. 皇冠体育appy
- bring together the assets of the deceased
- pay the deceased鈥檚 debts
- distribute the surplus estate to the beneficiaries.
Administration period
TSEM3240, TSEM6050, TSEM6100, TSEM6520
This is the period during which the personal representatives of a deceased are administering the estate. It starts the day following the date of death. It usually ceases when the personal representatives have 鈥榓scertained the residue of the estate鈥�. Until then, the personal representatives cannot assent to the residuary beneficiary鈥檚 title.
Although the exact date is a matter of fact, it can be difficult to determine. Case law shows that agreeing the date can be controversial. 皇冠体育app administration period can end before all the assets have passed out of the hands of the personal representatives. It can end when the personal representatives are ready to transfer the assets. 皇冠体育appy may continue to hold the assets as trustees, rather than personal representatives.
Administrator
TSEM6036, TSEM6039, TSEM6100, TSEM6520
An administrator is the person a court appoints to administer an estate. 皇冠体育app estate may, for example be of a person who died without leaving a valid will. An administrator has no power until the court grants him letters of administration.
皇冠体育app female equivalent is an administratrix.
Administratrix (plural administratices)
An administratrix is the person a court appoints to administer an estate. 皇冠体育app estate may, for example be of a person who died without leaving a valid will. An administratrix has no power until the court grants her letters of administration.
皇冠体育app male equivalent is an administrator.
Advancement
Advancement is an early payment of capital. 皇冠体育appre are three situations where this happens.
- Implied or presumptive trust. A father makes a payment, during his lifetime, to his child. 皇冠体育app payment is presumed to be part of the capital to which the recipient will eventually be entitled.
- Section 32 Trustee Act 1925. Section 32 Trustee Act 1925 allows trustees of some trusts to make a payment to a beneficiary. 皇冠体育app payment is made out of the trust capital.
- Payments authorised by the trust deed. A trust deed may authorise trustees to make advancements.
Affidavit
An affidavit is a statement made in writing, on oath, before a Commissioner of Oaths.
Personal representatives require an affidavit when establishing the amount of an estate, for inheritance tax purposes. 皇冠体育appy lodge it when applying for power to administer the estate.
Agnate
Agnate means relatives on the father鈥檚 side.
Alienate
鈥楢lienate鈥� means to convey away, or to dispose. It especially refers to the forfeiture of an interest.
Animus revocandi
鈥楢nimus revocandi鈥� means 鈥榯he intention of revoking鈥�.
Annuity
TSEM3775 onwards
An annuity is a fixed sum payable at stated intervals. It continues for a number of years, or until a happening occurs. This is often the death of the person receiving the annuity (the annuitant).
An annuity can result from
- a will
- a settlement between the living (inter-vivos)
- a deed of covenant
- a life insurance policy.
An annuity can come from a particular source of income. It depends on the terms of the original document. If the annuity is from real estate it is a rent-charge. A purchaser of the property is responsible for meeting the rent-charge.
An annuity from a will is merely a pecuniary legacy payable by instalments. It usually runs from the date of death. 皇冠体育app first instalment becomes payable at the end of the first year.
An annuitant may have the option to take a capital sum in lieu of an annuity. 皇冠体育app option can be included in the original document. Or it may arise by a rule of law.
For capital gains tax purposes, an annuity is a life interest in specified circumstances (CG36304 onwards).
Appointment
A power of appointment is a power, rather than a duty, to
- decide who will receive a benefit, or
- invite someone to undertake duties (for example to be a trustee), or
- invite someone to exercise powers.
General power
This authorises the appointment of anybody. It can include the person exercising the power (the donee).
Limited power
皇冠体育app power is limited to specific persons.
Apportionment
Apportionment Act 1870
鈥楢pportionment鈥� means dividing income between interests. 皇冠体育app split is based on the length of time that the income accrued. 皇冠体育app Apportionment Act 1870 provides rules for splitting income. 皇冠体育app rules apply to personal representatives and trustees. 皇冠体育app will or the settlement deed can state that the terms of the Apportionment Act are not to apply.
Appropriation
Appropriation is applying a particular fund or asset to satisfy a debt, legacy or entitlement. Say, for example, a will includes a legacy. 皇冠体育app executors may agree to transfer a specific asset instead.
Assent
Personal representatives assent to a legacy after satisfying themselves that
- the beneficiary is entitled to it
- the estate has sufficient funds to meet it
- the beneficiary is able to give a valid receipt.
Assent indicates they have found no reason to prevent the transfer of the legacy to the beneficiary. It establishes the beneficiary鈥檚 title. It also confirms the debt owed to the beneficiary. 皇冠体育app beneficiary has become the owner, even if not immediately taking possession.
If the legacy is real property, personal representatives must give assent in writing. 皇冠体育app assent then acts as a conveyance. Written assent is not essential if the legacy is an equitable interest in land. However it is better if all assents are written. This establishes the date the beneficiary became the owner.
After assent, beneficiaries can enforce their rights. Before assent, they can only enforce administration of the estate.
Assignment
TSEM1845
Assignment is the passing of rights by one person to another. 皇冠体育app person passing the rights is the assignor. 皇冠体育app recipient is the assignee.
皇冠体育app assignment of an interest in a trust must be in writing.
皇冠体育app transfer of the benefit of a lease is an assignment, not a sale of lease.
AT (Assessed Taxes)
鈥楢ssessed Taxes鈥� is a guidance manual with information about assessed taxes and computer charges. It explains the responsibilities of the two Accounts Offices. 皇冠体育appse are at Cumbernauld and Shipley.
Attorn
皇冠体育app word 鈥榓ttorn鈥� means to turn oneself over to another. Under feudal law it meant transferring homage and allegiance from one lord to another. It now means accepting a new landlord in place of another. It also refers to entrusting business to another, as in power of attorney.
Authorised investments
Trustee Investment Act 1961
皇冠体育app Trustee Investment Act 1961details the types of investments in which trustees can invest. 皇冠体育appse are authorised investments.
皇冠体育app document creating a trust may over-rule the provisions of the Act. It can allow trustees to invest in other types of investments.
B
Bailment
Bailment is when an owner (a bailor) deposits a chattel with another person (a bailee). 皇冠体育app bailee does not own the chattel. He merely has possession of it. This possession is subject to duties towards the owner.
This differs from a trust. A settlor creates a trust by passing over legal ownership to trustees.
Bankrupt
A bankrupt is an insolvent person who assigns his assets to a trustee. 皇冠体育app trustee administers them for the benefit of the bankrupt鈥檚 creditors. 皇冠体育app trustee distributes the assets to the creditors. 皇冠体育app bankrupt receives any surplus assets. 皇冠体育app trustee鈥檚 primary duty is to the creditors.
皇冠体育app appointment of the trustee follows a petition to the Bankruptcy Court. Either the bankrupt or the creditors can submit the petition.
Bare or simple trust
TSEM1030, TSEM3320, TSEM6272, TSEM6360听TSEM8520
皇冠体育app beneficiaries of a bare or simple trust have the right to take actual possession of trust property. Bare trustees hold the capital and income for the absolute benefit of the beneficiaries.
Beneficial interest
A beneficial interest entitles a person to the enjoyment or benefit of a property. 皇冠体育app right is subject to the laws of equity.
This is different from a nominal or bare legal owner such as a trustee.
Beneficiary
A beneficiary is the person for whose benefit property is held. 皇冠体育app person holding the property can be an administrator, executor or a trustee.
皇冠体育app beneficiary of a will could receive
- a legacy (general or specific)
- an annuity
- the residuary estate (either all or a share).
See also 鈥楽ole beneficiary鈥�.
Benjamin order
A Benjamin order is an order of the court. It allows a personal representative to assume that a missing beneficiary is dead. 皇冠体育app personal representative can distribute accordingly.
Bequeath
鈥楤equeath鈥� means to give personal property by a will. In strictness the word does not apply to real property. A gift of real property is a devise.
Bequest
A bequest is a gift of personal property in a will. In strictness the word does not apply to real property. A gift of real property is a devise.
Blood
鈥楤lood鈥� is used to describe persons from a common ancestor.
Whole blood means from the same pair of ancestors.
Half-blood means from one ancestor.
Bona vacantia
An estate is bona vacantia if there is nobody entitled to claim it. This happens if
- the deceased did not leave a will, and
- nobody can claim the estate under the laws of intestacy.
皇冠体育app property vests in the Crown, the Duchy of Lancaster or the Duchy of Cornwall. It depends where it is situated.
Breach of trust
A breach of trust can happen if trustees
- do not follow the terms of the trust document, or
- take action not allowed by general law.
A trustee may not be liable if the breach is merely technical.
C
Caeterorum
皇冠体育app word 鈥榗aeterorum鈥� literally means 鈥榦f the remainder鈥�. A grant caeterorum is a grant for the balance of an estate. This would follow a grant, for a specific part of the estate.
Capital
皇冠体育app capital of a trust or estate is its
- subject matter, or
- property, or
- corpus.
鈥楥补耻驳丑迟鈥�
A trust is 鈥渃aught鈥� if it falls within Section 660A ICTA 1988. 皇冠体育app income of 鈥渃aught鈥� trusts is generally treated as that of the settlor for all tax purposes.
CD (Automated Collection of Schedule D Tax)
皇冠体育app Automated Collection of Schedule D Tax Manual is known as the CD Manual. It was introduced following the computerisation of tax collection.
Certainty
A trust must have three certainties. 皇冠体育appy are certainty of
- words (intent)
- subject (the property and beneficial interests)
- object (beneficiaries or benefiting causes).
Cestui que trust (plural cestuis que trust)
Cestui que trust is the person for whose benefit a trust is created. It is the person with an equitable interest in property that is in the legal ownership of trustees.
CG (Capital Gains Manual)
皇冠体育app CG Manual covers all aspects of capital gains.
Charitable trust
TSEM1520, TSEM6273
A charitable trust must be for at least one of the following purposes
- relief of poverty
- advancement of education
- advancement of religion
- other purposes beneficial to the community.
Trusts that are not to relieve poverty must benefit the community at large. Or they must benefit an important section of the community. 皇冠体育appy must not be for particular private individuals. 皇冠体育appy must not be for a particular class of private individuals
Chattels
Chattels are any tangible property, other than freehold land. 皇冠体育appre are two types, chattels personal and chattels real.
Chattels personal
Chattels personal are moveable personal property.
Chattels real
Chattels real include leaseholds. Chattels real are transferred by assignment.
Child
For the purposes of the Settlements legislation, 鈥榗hild鈥� includes
- a step-child
- an adopted child
- an illegitimate child.
Chose in action
Chose in action is intangible property - a right of action to obtain money. It is transferred by document.
It includes
|
|
|
|
|
|
|
|
|
|
|
Chose in possession
Chose in possession is any property that can be physically possessed. It is, transferred by assignment, or by manual delivery.
It includes
- clothes
- furniture
- personal effects
- cars
- stock-in-trade
- plant and machinery
- live and dead stock.
Clogging
Clogging is attaching conditions to a mortgage to discourage redemption.
Codicil
A testator can alter a will without scrapping it, by preparing a codicil. This is a separate document that alters or explains the original. 皇冠体育app testator must sign it in the presence of two witnesses. 皇冠体育appy must then sign it in the presence of the testator. 皇冠体育appy do not have to be the same people who witnessed the original will.
Cognate
Cognate means relatives on the mother鈥檚 side.
Common law
Common law evolved, rather than being written. It is the part of English law derived from judicial decisions.
Completely constituted
A trust is completely constituted when its property finally and absolutely vests in the trustees. A declaration of intent to create a trust leaves a trust incomplete. It is only complete when the property vests in the trustees.
Trusts that arise under a will are completely constituted by the death of the testator. This applies even if they are executory trusts. 皇冠体育appse are trusts that need a further instrument to define the beneficial interests.
A beneficiary can enforce a trust once it is completely constituted.
Consideration
Consideration of blood
鈥楥onsideration of blood鈥� refers to the natural love and affection felt for a relative. It can be a good consideration, but isn鈥檛 a valuable consideration. Every contract must be under seal, for it to be binding in the eyes of the law.
Valuable consideration
A valuable consideration is for money or money鈥檚 worth. Or it can be for something of value, like forbearing to sue, or for marriage. 鈥楳oney鈥檚 worth鈥� is something valuable which is measurable in terms of money.
It is often difficult to decide whether a settlement is for valuable consideration. Refer to听Trusts Technical听before corresponding about the subject.
Constructive trust
A constructive trust is imposed by the rules of equity. It must satisfy the demands of justice and good conscience. For example, trustees may receive a profit or income from trust property. 皇冠体育appy hold it on a constructive trust, and apply it to the purposes of the principal trust.
Contingent interest
A contingent interest is dependent on an event, which is not certain to occur. For example, this could be the beneficiary reaching the age of thirty.
Co-ownership
Co-ownership is two or more persons owning the same property at the same time.
皇冠体育app two main forms of co-ownership are joint tenancy and tenancy in common.
Joint tenancy
Joint tenants have equal rights to possess the same property. 皇冠体育appy acquired it from the same source. When a joint tenant dies, the survivor takes his share. When only one person survives, he becomes entitled absolutely to the property.
Tenancy in common
Tenants in common are effectively co-owners of an undivided beneficial interest in land. This gives them possession of it. No individual tenant in common has exclusive possession of any part of the property. When a tenant in common dies, his successor becomes a tenant in common in his place. 皇冠体育app interest does not pass to the other co-owners.
Coverture
Coverture is the status of being a wife under the authority or protection of her husband.
Cum div
鈥楥um div鈥� means 鈥榳ith the dividend鈥�.
When valuing an estate, stocks are included at the Stock Exchange quoted price. If this is a 鈥榗um div.鈥� price, it will include the next dividend payment. 皇冠体育app Apportionment Act 1870 instructs personal representatives to apportion the dividend on a day-to- day basis.
It is important to get the apportionment correct. One beneficiary may have title to capital and another to income.
Cum testamento annexo
鈥楥um testamento annexo鈥� means 鈥榳ith the will annexed鈥�. It applies where a testator has made a valid will, but there is no executor acting. This can happen if
- the testator did not name an executor, or
- the person named cannot, or will not, act.
Custodian trustee
A custodian trustee has custody and care of trust property. 皇冠体育app property is vested in him. He does not have management of the property. This usually occurs under the rules of the Public Trustee Act 1906.
Cutting timber trees
皇冠体育app cutting of timber trees is within the doctrine of waste.
皇冠体育app kind of trees regarded as timber varies around the country. Usually it is oak, ash and elm at least 20 years old.
鈥榃aste鈥� imposes restrictions on the occupant of land. 皇冠体育app occupant cannot use it as he pleases. 皇冠体育appre are three kinds of waste, equitable, permissive and voluntary.
Cy-pres
鈥楥y-pres鈥� literally means 鈥榥ear to鈥�. 皇冠体育app doctrine is in the Charities Act 1960. A settlor or testator may express a general intention, and how to carry it out. It may not be possible to do this. 皇冠体育app court can authorise the creation of a charitable trust. This would operate as near as possible to the original intention. 皇冠体育app court can also use this principle to ensure that a gift to a specific charity does not fail simply because the charity has gone out of existence. 皇冠体育appy would chose another charity with similar objectives to receive the money
D
Deed
A deed is a written document recording a legal transaction. It must be signed and delivered. Often there will be stamp duty due on the deed. 皇冠体育app law cannot enforce the deed until that stamp duty is paid.
Deed of arrangement
A deed of arrangement is a written document that assigns a debtor鈥檚 assets. It often appoints a trustee to safeguard the creditor鈥檚 interests. It assigns the assets for the benefit of the creditors.
Deeds of family arrangement
皇冠体育appse are effected to alter the basis on which a deceased鈥檚 estate is to be distributed. 皇冠体育appy are sometimes called deeds of variation.
Delegation
Delegation is the act of delegating duties. Normally a trustee is not allowed to delegate. 皇冠体育app settlor has entrusted the trustee to personally do his duty.
皇冠体育appre are a few statutory exceptions to this primary rule. 皇冠体育appse allow a trustee to employ agents and advisers. In some circumstances, a trustee may give a power of attorney.
Demise
Demise means to grant a lease of land or other property.
Demonstrative legacy
A demonstrative legacy specifically refers to the source from which it is to be paid. This could be 鈥樎�500 from my building society account鈥�.
皇冠体育app executor must assent to the legacy, before the legatee gets it.
Determinable interest
鈥楧eterminable interest鈥� applies to a life interest that ends following an action by the beneficiary. 皇冠体育app beneficiary may, for example, assign his interest.
皇冠体育app original trust document sometimes anticipates such an action. It may provide that a discretionary trust shall then come into existence.
Devastavit
鈥楧evastavit鈥� literally means 鈥榟e has wasted鈥�. It refers to when a personal representative wastes assets, or misapplies them.
Devise
To devise is to give real property. A devise is a gift of real property.
Discretionary interest
皇冠体育app beneficiary鈥檚 right to income is at the discretion of the trustees. 皇冠体育app trustees must exercise their power fairly.
No beneficiary has a right to the income arising. (None has an interest in possession).
Discretionary trust
Trustees of a discretionary trust have the power to decide how to apply the trust income. 皇冠体育appy may also be able to select the persons or objects to benefit. 皇冠体育appy must exercise their powers fairly.
Disposition
A disposition is a bestowal. It can be by will, deed or orally.
皇冠体育app word has a wider meaning than grant or assignment. It would include a beneficiary putting his beneficial interest into trust for someone else.
Donatio mortis causa (plural donationes mortis causa)
A 鈥榞ift on account of death鈥� (donatio mortis causa) is a gift of personal property. It is given by of a donor who is expecting to die. It is effective only if the donor dies. It automatically lapses if the donor recovers. 皇冠体育app donor can changes his mind, and revoke the gift. It is neither a gift between the living (inter-vivos) nor a legacy.
It applies to personal property only- never to real property.
E
Easement
Easement is a right that an owner of land enjoys. 皇冠体育app right is over other land that he does not own. It might, for example, be a right of way over adjoining land, to get to his own.
Emblements
Emblements are natural products of the soil that result from husbandry. 皇冠体育appy would include corn and cultivated fruit. 皇冠体育appy would not include wild fruits.
Entail
Entail is to settle landed estates on a specific line of heirs. This ensures that the immediate possessor may not dispose of the estate.
It is possible to convert to fee simple (effectively absolute ownership). 皇冠体育app change is known as barring or breaking the entail.
It is not possible to create an entailed interest following the commencement of the Trusts of Land and Appointment of Trustees Act 1996 (Schedule 1, Paragraph 5).
Equitable
Equitable means in accordance with the rules of equity.
皇冠体育app other two sources of English law are common law and statute law.
Equitable interest
An equitable interest entitles a person to the enjoyment or benefit of a property. 皇冠体育app right is subject to the laws of equity.
This contrasts to a nominal or bare legal owner such as a trustee.
Equitable waste
A life-tenant who commits wanton destruction is liable in equity. This is the doctrine of equitable waste.
鈥榃aste鈥� imposes restrictions on the occupant of land. 皇冠体育app occupant cannot use it as he pleases.
皇冠体育appre are three kinds of waste, equitable, permissive and voluntary.
Equitable waste applies even if the settlement permits other forms of waste. 皇冠体育app settlement must specifically exclude equitable waste, for it not to apply.
A tenant-in-tail has a life interest in an entailed estate. He is liable for equitable waste. He is unimpeachable for other waste.
Equity
Rules of equity
Equity was originally a body of rules and principles that the Lord Chancellor applied in his own courts. As equity evolved, it modified the impact of common law, to achieve natural justice. In recent times English law is increasingly contained in Acts of Parliament. This is known as statute law. Legislation can alter both common law and equity. 皇冠体育app Courts administer all three forms of the law.
Equity
Equity usually means an equitable interest in property. It can mean a procedural right that is ancillary to some right of property. This could, for example, be an expectancy under a will or intestacy. Or it may be a right to obtain a remedy through the rules of equity.
Equity of a company
皇冠体育app equity of a company is the net value of its assets. This is the amount split between the shareholders, on realisation of the assets. 皇冠体育app ordinary shares in a company are often called equities.
ESC (Extra-statutory concession)
An extra-statutory concession is a relaxation of the strict letter of the law. It gives the taxpayer a tax reduction that would not otherwise be due. We do not give a concession if there is an attempt to use it for tax avoidance.
Estate
鈥楨state鈥� is a person鈥檚 total possessions. It includes goods, money and property of every kind. In particular, 鈥榚state鈥� refers to the possessions that a deceased person leaves.
Estoppel
Estoppel is a rule of evidence. It is a conclusive statement that cannot be denied by the party it affects. For example, Dave bases his action on a statement that Roger supplied. Dave鈥檚 action adversely affects Roger. Roger must regard his statement as the truth. He cannot argue otherwise.
Ex div
鈥楨x div鈥� means 鈥榳ithout the dividend鈥�.
When valuing an estate, stocks are included at the Stock Exchange quoted price. If this is an 鈥榚x div.鈥� price, it will exclude the next dividend payment. 皇冠体育app Apportionment Act 1870 instructs personal representatives to apportion the dividend on a day-to- day basis.
It is important to get the apportionment correct. One beneficiary may have title to capital and another to income.
Executed trust
An executed trust includes full details of the settlor鈥檚 intentions. 皇冠体育app trustees know exactly what to do. 皇冠体育appy need no other instrument to establish the trust. 皇冠体育app intentions may be in a will, deed or similar document.
Executor (female executrix female plural executrices)
An executor is a personal representative of a deceased person.
If there is a valid will, it names the executors. Naming executors in a will is merely an invitation to act. 皇冠体育appre is no obligation. If they accept, the executors are committed to the full duties of the office. 皇冠体育appse can be onerous.
If an executor declines the appointment (or is unable to act), the will may name an alternative executor. If it doesn鈥檛, the courts appoint a personal representative (known as an administrator). 皇冠体育app administrator obeys the terms of the will.
Executor de son tort
皇冠体育app phrase means 鈥榦f his own wrong鈥�. It applies to any person who acts like an executor
- even though he does not have the authority, or
- although the will is invalid. or
- before receiving a grant of letters of administration.
皇冠体育app person must obey the strict code that applies to executors. This includes not making a profit from the estate.
Executory trust
Executory trusts need a further instrument to define the beneficial interests. Despite this, they are valid. 皇冠体育app property is already vested in the trustees.
Expectancy
Expectancy is an equitable interest that is not yet in possession. 皇冠体育app interest will entitle a person to the enjoyment or benefit of property.
It is possible to raise money by assigning some expectancies. This could, for example, be an interest under the will of a living person.
Express trust
TSEM6262
An express trust is created by a declaration. This may be in a settlement between the living (inter-vivos) or in a will. It can be a private trust or a charitable trust.
F
FA (Finance Act)
FA is short for Finance Act.
Fee simple
Fee simple is the legal estate or interest in freehold land. It is the nearest anyone can get to absolute ownership of land. It is free from any limitations. Fee is one of the two estates in land that are legal estates. 皇冠体育app other is a lease for a term of years absolute.
Fee tail
Fee tail is an entailed estate that may descend only to a certain class of heirs. Originally it applied only to an estate in land. Now it applies also to personal property (personalty).
It is possible to convert fee tail to fee simple (effectively absolute ownership). 皇冠体育app change is known as barring or breaking the entail.
It is not possible to create an entailed interest following the commencement of the Trusts of Land and Appointment of Trustees Act 1996 (Schedule 1, Paragraph 5).
Fiduciary
Fiduciary is a relationship where one person must exercise rights and powers for the benefit of others. This exercise of rights and powers must be in good faith. He acts as a trustee.
He must not profit from his position, unless provisions expressly allow this.
Foreign trust
TSEM1100
A foreign trust is governed by the laws of a country outside the United Kingdom.
On the other hand it is possible for a trust to be non-resident even if it is governed by the laws of say England and Wales. HMRC Trusts & Estates Nottingham deal with all foreign and non-resident trusts.
Freehold
鈥楩reehold鈥� refers to property on which there is no rent payable. It is free of duty except to the monarch.
G
General legacy
A general legacy is not confined to one particular thing. It is often money, although 鈥榯he 拢100 in a tin box under my bed鈥� would be a specific legacy.
皇冠体育app executor must assent to the legacy, before the legatee gets it.
Gift inter-vivos (between the living)
A gift inter-vivos is one the donor makes during his lifetime.
When the donor dies the gift does not form part of his estate. However for capital transfer tax purposes, it may be added to the value of his estate. It depends on the time between the gift and the death.
H
Heir
An heir is the person who succeeds to property and title when the holder dies.
Hotchpot
Hotchpot is a mixture of property. 皇冠体育app value of all property is brought together to secure an equable division amongst beneficiaries. It includes sums that beneficiaries have already received. This ensures that no beneficiary has an unfair advantage over others.
It can apply where
- a settlement deeds has a clause to this effect
- there is a partial intestacy
- there has been an advancement under Section 32 Trustee Act 1925.
I
Immoveables
Immoveables is land as opposed to moveable property. It includes leaseholds and land on trust for sale.
Impeachment for waste
Impeachment for waste means liability for damages. It applies when a life tenant reduces the value of settled property.
It is not applicable if the settlement deed allows the life tenant to commit acts of wastage. Some deeds may even provide for wanton destruction.
Implied trust (presumptive trust)
A person鈥檚 actions may show or imply that a trust results. For example, a wife may buy a house, and convey it to her husband. He is presumed to hold the property on trust for the wife.
Other legal presumptions can defeat an implied trust. For example, a father may buy an item in the name of his child. A father (but not a mother) is expected to make provisions for children. Unless there is evidence to the contrary, the purchase would be regarded as for the benefit of the child. 皇冠体育appre would be no implied trust in favour of the father.
Not all implied or presumptive trusts are bare or simple trusts, although they often are.
Incompletely constituted
An incompletely constituted trust does not have property vested in the trustees. 皇冠体育appre has been just a declared intention to create a trust.
Inter-vivos
Inter-vivos means between living persons.
Interest
A person鈥檚 interest in an item includes rights titles advantages duties and liabilities.
皇冠体育appre are five legal interests in land. 皇冠体育appse are
- easements
- rent charges
- charges by way of legal mortgage
- statutory charges on land
- certain rights of entry.
An interest in land is different from an estate in land.
Interest in possession
TSEM1105
皇冠体育appre is no statutory definition of 鈥榠nterest in possession鈥�.
A Board鈥檚 Press Notice dated 12 February 1976 indicates that an interest in possession
鈥榚xists where the person having the interest has the immediate entitlement (subject to any prior claims by the trustees for expenses or other outgoings properly payable out of income) to any income produced 鈥�.. as the income arises 鈥�..鈥�.
Intermediate income
Intermediate income arises from the capital of a bestowal, until the beneficiary receives the capital. 皇冠体育app term applies to wills, and to settlements between the living (inter-vivos).
皇冠体育app terms of the instrument determine whether the beneficiary receives the intermediate income.
Usually, the following carry intermediate income
- specific gifts under a will
- a gift of residue
- a future or contingent legacy, if the testator is the parent, or acting as the parent, of the beneficiary.
Intestate
An intestate is a person who dies without
- leaving a valid will, or
- disposing of all his property in a valid will.
J
Joint tenants
Joint tenants have equal rights to possess the same property. 皇冠体育appy acquired it from the same source. When a joint tenant dies, the survivor takes his share. When only one person survives, he becomes entitled absolutely to the property.
Trustees are always joint tenants.
Joint tenants are different from tenants in common.
Judicial trustee
皇冠体育app courts have the discretion to appoint a judicial trustee. 皇冠体育app appointment follows an application by a settlor, trustee or beneficiary.
L
Lapse
Lapse is the failure of a legacy or gift of real property. It results from the legatee鈥檚 death during the testator鈥檚 lifetime.
It does not apply if the legatee is an issue of the testator with offspring living at the testator鈥檚 death. In that event, the money falls into the legatee鈥檚 residuary estate. 皇冠体育app testator can provide otherwise in the will.
A will may provide for a legacy to a person or his personal representative. If so, the legacy does not lapse.
Lease for a term of years absolute
A lease for a term of years absolute has a fixed and certain minimum duration. Normally it must be granted by a deed. 皇冠体育app exception is a rack rent for three years or less.
It is one of the two estates in land that are legal estates. 皇冠体育app other is fee (simple or life).
Legacy
A legacy is strictly a gift of personal property in a will. 皇冠体育app word is often used loosely to include real property. 皇冠体育app correct word for a gift of real property is devise. 皇冠体育app executor must assent to a legacy before the legatee gets it.
皇冠体育appre are three types of legacy
- Specific legacy
皇冠体育app gift is a definite thing that is clearly identified. It may, for example, be 鈥榤y horse Ringmaster鈥�.
- General legacy
皇冠体育app legacy is not confined to one particular thing. It is often money, although 鈥榯he 拢100 in a tin box under my bed鈥� would be a specific legacy.
- Demonstrative legacy
皇冠体育app legacy specifically refers to the source from which it is to be paid. This could be 鈥樎�500 from my building society account鈥�.
Legal estate
皇冠体育app Law of Property Act 1925 allows only two kinds of legal estate. 皇冠体育appy are
- Fee simple
Fee simple is the nearest anyone can get to absolute ownership of land. It is free from any limitations.
- Lease for a term of years absolute
皇冠体育app lease has a fixed and certain minimum duration. Normally it must be granted by a deed. 皇冠体育app exception is a rack rent for three years or less.
All other estates are equitable estates under a trust.
Legal interest
Legal interest is a right in property that is governed by statute and common law. 皇冠体育app law of equity does not affect it.
Legatee
A legatee is the person to whom a legacy has been bequeathed. For capital gains tax purposes, there is a definition in TCGA92/S64 (2). 皇冠体育appre are instructions at CG31100.
Letters of administration
Letters of administration are an administrator鈥檚 authority to realise the estate of a deceased. 皇冠体育app High Court issues them under its seal.
皇冠体育app court issues them if the deceased did not leave a valid will. In strictness the assets pass immediately to the President of the Family Division of the High Court. 皇冠体育app court then appoints an administrator.
Sometimes a named executor declines to accept the appointment. Or he may be unable to act. 皇冠体育app will may name an alternative executor. If it doesn鈥檛, the courts appoint an administrator to carry out the terms of the will. 皇冠体育app grant would be 鈥榣etters of administration with will annexed (cum testamento annexo)鈥�.
Naming an executor in a will is merely an invitation to act. 皇冠体育appre is no obligation to accept.
Life estate
A life estate is strictly a life interest in respect of real property. 皇冠体育app life tenant is usually known as the tenant for life.
For management purposes, the tenant for life can request that the trustees vest the legal estate in him. He can grant leases or sell the land. He is restricted by the doctrine of waste. This imposes restrictions on how the tenant for life can use the land
He is a beneficiary entitled to the benefits arising from the land. But he is also a trustee with the legal ownership of land. He owes duty to those with succeeding interests. If he sells land, the proceeds must go to the trustees of the settlement. 皇冠体育appy do not go to the tenant for life.
Life interest
TSEM1110, TSEM6203
皇冠体育app beneficiary (life tenant) has an interest in the income arising for a period of time. This often ends with the life tenant鈥檚 death. But it can be for some other period.
For the purposes of Chapter 6 Part 5 ITTOIA, it is a limited interest, not absolute.
皇冠体育app term has a specific meaning for capital gains tax purposes. Details are at CG36351 onwards.
Liferent
Liferent is the Scottish equivalent of a life interest.
Limited interest
A limited interest is less then full or absolute. For example, a life interest (TSEM6203) is limited. It confers only a right to income (normally for the period of the beneficiary鈥檚 lifetime) and no right to capital.
A 鈥榣imited interest in residue鈥� is statutorily defined in ITTOIA/S650(2).
M
Marriage as a valuable consideration
A settlement for marriage as a valuable consideration is made
- before, and in contemplation, of marriage, or
- after marriage, but because of an agreement before the marriage.
A settlement made after marriage, with no earlier agreement, is voluntary. If it remains incompletely constituted it is not binding. 皇冠体育app only people able to enforce the settlement are
- the husband
- the wife
- issue of the marriage.
It is often difficult to decide whether a settlement is for a valuable consideration. Refer to听Trusts Technical before corresponding about the subject.
Marshalling
Marshalling is the process of deciding the priority of claims against an estate. Statute defines the order, but the will can modify this.
Sometimes there are insufficient funds to meet the claims of all creditors and legatees. It is necessary to decide if any should be met in full, and what to do about the others.
Mining
A tenant-for-life may grant mining leases. He has to pay some of the rent to the trustees of the settlement. 皇冠体育app proportion depends on whether he is impeachable for waste.
鈥榃aste鈥� imposes restrictions on the occupant of land. 皇冠体育app occupant cannot use it as he pleases. 皇冠体育appre are three kinds of waste, equitable, permissive and voluntary.
Minor
鈥楳inor鈥� means under the age of 18. 皇冠体育app rules are contained in the Family Law Reform Act 1969
For the purposes of the Settlements legislation, 鈥榤inor child鈥� includes
- a step-child
- an adopted child
- an illegitimate child.
For the purpose of Section 5 of the Trusts (Scotland) Act 1961 鈥檓inor鈥� means a person under the age of 21.
Mixed trust
TSEM1115, TSEM3525
Beneficiaries have a discretionary interest (TSEM1035) in some of the trust income. One or more of them has an interest in possession in the rest. 皇冠体育app trust may be part accumulation and maintenance.
Mutual wills
Mutual wills are where two people agree to leave each other an interest in their respective estates. When one of them dies, the will of the survivor is irrevocable. He holds his own property on an implied trust. He must honour the original agreement.
N
Nominal settlement
TSEM1505
A nominal settlement is one where the total amount settled (cash or assets) is worth less than 拢1,000.
Non-discretionary trust
TSEM1105
A non discretionary trust is one where all the beneficiaries have an interest in possession.
O
Overreaching
Overreaching is the transfer of an equitable interest in land. 皇冠体育app transfer is to capital derived from the sale of the land.
P
Pecuniary legacy
A pecuniary legacy is
- a legacy of money, or
- a general legacy expressed in terms of money.
Sometimes a legacy is payable in the future. Income (intermediate income) can arise on the capital until then. 皇冠体育app wording of the will often shows whether the future legacy carries the income.
Per capita
鈥楶er capita鈥� means 鈥榖y the heads鈥�. All beneficiaries inherit an equal amount.
Per stirpes
鈥楶er stirpes鈥� means 鈥榖y the stems鈥� or 鈥榯hrough the stocks鈥�. Say, for example, Bob dies before his father. When Bob鈥檚 father dies, Bob鈥檚 children get Bob鈥檚 share of his father鈥檚 estate. 皇冠体育app share comes to them per stirpes. 皇冠体育appy split this share equally amongst themselves.
Permissive waste
Permissive waste applies to life tenants who allow land to deteriorate for want of attention. A settlement must specifically impose the restriction of permissive waste for it to apply.
鈥榃aste鈥� imposes restrictions on the occupant of land. 皇冠体育app occupant cannot use it as he pleases. 皇冠体育appre are three kinds of waste, equitable, permissive and voluntary.
A tenant-in-tail has a life interest in an entailed estate. He cannot be liable for permissive waste.
Perpetuities
Under common law, the rule against perpetuities provides that no interest in property is valid unless it becomes fixed, if at all, within a specified perpetuity period. 皇冠体育app current perpetuity period is:
- A prescribed statutory period of 125 years (the Perpetuities and Accumulations Act 2009).
For trusts established prior to the 2009 Act there was an optional statutory period of:-
- Up to 80 years, or
- the common law period.
皇冠体育app common law period is the lifetime of the last to die of certain individuals alive when the interest is created (known as 鈥榣ives in being鈥� or 鈥榤easuring lives鈥�) plus 21 years (the Perpetuities and Accumulations Act 1964).
If future interests are not certain to vest within the applicable statutory period, the trust would be invalid from the start. Because of the harshness of this perpetuity rule, S7 of the 2009 Act (and previously S3(1) of the 1964 Act) provides for a 鈥榳ait and see鈥� rule. Under that rule the courts 鈥� wait and see鈥� if the interest does in fact vest within the perpetuity period. If it does vest within the appropriate perpetuity period then the interest is valid, Refer any problems about perpetuities to听Trusts听Technical .
Personal representative
A personal representative is an executor or administrator of a deceased person. He is the legal owner of the deceased鈥檚 estate. An executor鈥檚 authority is a grant of probate. An administrator鈥檚 authority is a grant of letters of administration.
A personal representative must exercise the same degree of care as a trustee. He must adhere to the Trustee Act 1925. Despite this, there are clear differences between administration periods and trusts.
皇冠体育app basic function of personal representatives is to distribute assets. In contrast, trustees have an underlying duty to hold onto property.
Personal representatives are treated as a single and continuing body of persons. 皇冠体育appre is no tax consequence if there is a change in the individuals acting.
Personalty
Personalty (chattels personal) is any property, other than real property, passing on death.
For inheritance tax purposes only, personalty includes chattels real.
Plene administravit
鈥楶lene administravit鈥� means 鈥榟e has fully administered鈥�. It is a defence that personal representatives use. It rebuts creditors鈥� claims submitted after the administration period has ended.
Power
Power is an authority vested in a person to deal with, or dispose of property that is not his own. It is usually equitable, but may be legal.
A power is discretionary. This differs from a trust, which is imperative. A trust instrument may give powers to trustees. 皇冠体育app difference is not always obvious.
Power of appointment
A power of appointment is a power, rather than a duty, to
- decide who will receive a benefit, or
- invite someone to undertake duties (for example to be a trustee), or
- invite someone to exercise powers.
General power
This authorises the appointment of anybody. It can include the person exercising the power (the donee).
Limited power
皇冠体育app power is limited to specific persons.
Precatory words
Precatory words are words of entreaty that a settlor uses. Often it is a testator. 皇冠体育appy imply an intention to create a trust. 皇冠体育appy create an express trust if they satisfy three certainties. 皇冠体育appy are certainty of
- words (intent)
- subject (the property and beneficial interests)
- object (beneficiaries or benefiting causes).
Presumption of advancement
鈥楶resumption of advancement鈥� means an owed duty is apparently discharged earlier than necessary. 皇冠体育app duty may be legal or moral. For example, it could be a father鈥檚 duty to provide for his child. It is often when a father supplies money to buy property in the name of his child.
皇冠体育app action may fully or partially discharge the duty.
Presumptive trust (implied trust)
A person鈥檚 actions may show or imply that a trust results. For example, a wife may buy a house, and convey it to her husband. He is presumed to hold the property on trust for the wife.
Other legal presumptions can defeat a presumptive trust. For example, a father may buy an item in the name of his child. A father (but not a mother) is expected to make provisions for children. Unless there is evidence to the contrary, the purchase would be regarded as for the benefit of the child. 皇冠体育appre would be no presumptive trust in favour of the father.
Presumptive or implied trusts are bare or simple trusts. This means beneficiaries have the right to take actual possession of the trust property.
Probate
鈥楶robate鈥� is the proving of a will before a probate court.
皇冠体育app court issues a document that comprises the grant. This bears the seal of the court, and authorises the executor to act. It authenticates the copy of the will. It is often known as the probate. In strictness it is the probate act.
Profit-a-prendre
鈥楶rofit-a-prendre鈥� is the right to take certain items from the land of another. 皇冠体育appse are
- part of the soil itself (for example gravel)
- part of the produce of the soil (for example pasture for cattle).
Property
鈥楶roperty鈥� means anything tangible or intangible, which can be owned. Ownership can pass to another owner. Effectively this means any assets. 鈥楶roperty鈥� is not just real property, or interests in land or buildings.
Protection, Court of
皇冠体育app Court of Protection is an office of the Supreme Court. It was formerly called the Management and Administration Department. It is under the jurisdiction of a judge of the Chancery Division.
Protective trust
A trust document may contain provisions to stop a beneficiary from prejudicing his right to the income of the trust. Prejudicial actions could include surrendering or assigning the interest, or becoming bankrupt.
皇冠体育app safeguard provides for the interest to cease. Instead, the trustees have discretion to apply income to a class of beneficiaries including the original beneficiary. 皇冠体育appy usually do this by applying Section 33 Trustee Act 1925.
It converts a non-discretionary trust into a discretionary trust.
Public Trustee
皇冠体育app Public Trustee is an official appointed by an Act of Parliament. 皇冠体育app Public Trustee
- administers, and safeguards, certain small estates
- must act as trustee for most people who request.
R
Rack rent
A rack rent is a high or extortionate rent.
Realty (real property)
Realty is freehold, or real, property.
皇冠体育app word 鈥榬eal鈥� means property that could be the subject of a 鈥榬eal鈥� action in the courts. It does not mean the opposite of imaginary. It is derived from the fact that a 鈥榬eal鈥� action was the only way a plaintiff could recover a 鈥榯hing鈥� (a 鈥榬es鈥�). This kind of action applied only to certain rights in land. 皇冠体育app best known of these is normally called freehold property. It is more correctly described as fee simple.
In strict feudal theory, the property was held of the Crown, and was not absolutely owned.
It is transferred by conveyance.
A freehold is personal property. Capital Taxes Office still use this classification.
Receipt
Receipt is the act of receiving.
Remainder
Remainder is the right to real estate that has vested absolutely. It vests because no other interests remain.
皇冠体育app word is often applied, incorrectly, to personal property.
Remainderman
A remainderman is entitled to what is left when all limited interests cease.
Another name for remainderman is reversioner. This is especially so if the remainderman is also the settlor.
Res
鈥楻es鈥� means 鈥榯hing鈥�. That which could be recovered by a 鈥榬eal鈥� action in common law. 皇冠体育app action applied only to certain rights in land. 皇冠体育app best known of these is normally called freehold property. It is more correctly described as fee simple.
Residuary beneficiary
A residuary beneficiary has an interest in the residue of an estate. A right to income only, is a limited interest. A right to capital and income when the residue is ascertained, is an absolute interest. 皇冠体育app right may not necessarily be immediate.
Residuary devisee
A residuary devisee takes the real property left in a will. This is after payment of debts, duties and legacies charged on the property.
Residuary legatee
A residuary legatee takes the property, other than real property, left by a deceased. This is after payment of debts, duties and legacies, other than those on property.
皇冠体育app name is often applied, incorrectly, to the person taking the whole residue, including real property.
Residue of estate
皇冠体育app residue of an estate is the balance of a deceased鈥檚 estate after all debts and duties. If there was a valid will, it is after specific bequests and devises.
皇冠体育app personal representatives prepare a statement of account showing what has come in, and what is payable out. 皇冠体育appy then calculate the amount of 鈥榬esidue鈥�. This account is known as the 鈥榓scertainment of residue鈥�.
Normally the date of ascertainment of residue will be the end of the administration period. Refer to听Trusts Technical any doubts or difficulties about when an administration period ends.
Resulting trust
皇冠体育app interests of trust beneficiaries will eventually cease. 皇冠体育app settlor should have provided for other interests. If he did not, the beneficial interest returns (results) to the settlor. This is an implied trust. If trustees continue to hold a legal interest, the beneficiary becomes a bare trustee.
Reversion
Reversion is the future return of property to the owner. This could happen when a lease runs out, or a life-tenant dies. 皇冠体育app term particularly refers to the return of land.
Reversionary interest
A reversionary interest is a deferred right to property.
S
Secret trust
A will sometimes transfers legal ownership, without specifying that the property is to be held in trust. We refer to this kind of arrangement as 鈥榓 secret trust鈥�. Send all such cases to听Trusts Technical.
Trusts听Technical will accept the arrangement only if certain conditions are met. Before death the testator must have given the trustees details of the trust. 皇冠体育app trustees must have accepted the resultant obligations.
Half-secret trust
A half-secret trust is similar. 皇冠体育app will appoints trustees and specifies the property, without giving other instructions. 皇冠体育app testator must have:
- instructed the trustees, or
- written instructions for later transmission to the trustees
when he made out the will, or before that date.
Again, refer all such cases to听Trusts听Technical.
Settle
鈥楽ettle鈥� means to make a settlement. This is a series of interests in property. 皇冠体育appy are for different persons in succession.
If the property includes land, the settlement normally must be in writing.
Settled land
Settled land is subject to a strict settlement. This means that a disposition has created a series of interests in the land. 皇冠体育app first of these interests is limited but vested. It is a life-tenancy (normally known as a life interest). 皇冠体育app beneficiary is a tenant-for life.
皇冠体育app last interest is the remainderman. This is absolute and vested. It comes into possession when the prior interests are exhausted.
Tenant-for-life
皇冠体育app tenant-for-life has a dual capacity. 皇冠体育app legal estate in the land is vested in him. This is as trustee for all the beneficiaries. (This does not make him a trustee of the settlement). But he is also a beneficiary. This entitles him to the benefits from the land.
He has the power to
- sell
- lease
- deal with the land as a full owner.
He must exercise these rights and powers in good faith. He has to act for the benefit of others.
皇冠体育app trustees of the settlement are protectors of all the beneficiaries. This includes the tenant-for-life. 皇冠体育appy have an obligation to carry out the terms of the settlement.
Trust for sale
皇冠体育app trust document may put land into a trust for sale. 皇冠体育app land is not settled land. 皇冠体育app trustees of the settlement are the legal owners of the land. 皇冠体育app beneficiary cannot require the trustees to transfer the legal estate in the land. 皇冠体育app trustees can delegate to the tenant, powers to manage the estate. 皇冠体育appse cannot include the power to sell.
皇冠体育app Trusts of Land and Appointment of Trustees Act 1996 abolished the dual system of trusts for sale and strict settlements. It replaced them with an entirely new single system following which no new strict settlements can be made.
Settled property
TCGA92/S68
皇冠体育appre is a definition of settled property, for capital gains tax purposes, at TCGA92/S68 (CG33230). This reads:
鈥業n this Act, unless the context otherwise requires, `settled property鈥� means any property held in trust other than property to which section 60 applies鈥�.
Section 60 deals with nominees and bare or simple trusts.
Settlement
TSEM1015, TSEM4100 onwards
General definition
A settlement is an arrangement that gives a series of equitable interests in property in succession. It is a means of creating an interest in property for beneficiaries, without giving them the legal interest. 皇冠体育app arrangement can be by a settlement inter-vivos, or by a will.
皇冠体育app person creating the interest is the settlor (in Scotland the truster). He may be a beneficiary. When making the trust, he may retain the legal interest. Or he may pass the legal interest to trustees, to hold the property in trust for the beneficiaries. He may name himself as a trustee.
A settlement may be a gift (voluntary settlement) or for valuable consideration.
Chapter 5 Part 5 ITTOIA
Chapter 5 Part 5 ITTOIA has the anti-avoidance provisions. 皇冠体育appy apply to all settlements, other than those set up by a will. For these purposes, the word settlement has a very wide meaning. It includes:
- disposition
- trust
- covenant
- agreement
- arrangement
- transfer of assets
Settlor
A settlor is a person who settles property. This can be by a settlement between the living (inter-vivos) or in a will. A settlor in a will is usually called a testator.
皇冠体育app settlor can appoint himself as a trustee. But he cannot do what he likes with the property. As a trustee he holds the assets in a fiduciary capacity. This means he must exercise rights and powers in good faith for the benefit of beneficiaries.
Trust property does not pass to the settlor鈥檚 personal representatives when he dies.
Chapter 5 Part 5 ITTOIA
Chapter 5 Part 5 ITTOIA has the anti-avoidance provisions. 皇冠体育appy apply to all settlements, other than those set up by a will. For these purposes, the word settlor has a wide meaning. According to Section 620 ITTOIA.
A person is treated for the purposes of this Chapter as having made a settlement if the person
- has made or entered into the settlement directly or indirectly,
- has provided funds directly or indirectly for the purpose of the settlement,
- has undertaken to provide funds directly or indirectly for the purpose of the settlement, or
- has made a reciprocal arrangement with another person for the other person to make or enter into the settlement.
Simple trust
TSEM1030, TSEM3320, TSEM6272, TSEM6360听TSEM8520
皇冠体育app beneficiary of a simple trust has the right to take actual possession of the trust property. Trustees of simple trusts are 鈥榥ames鈥� or 鈥榙ummies鈥� for the true owner. 皇冠体育appy are often known as nominees, especially if the assets are shares in a limited company.
Simple trusts are also known as bare trusts.
Socage
Socage is a feudal tenure of land. It involves payment of rent or other non-military service to a superior.
Sole beneficiary
A sole beneficiary is entitled to all the trust income available for distribution.
This does not include a beneficiary entitled to
- the residue of available trust income after a payment (for example an annuity)
- the residue of available trust income after complying with provisions to accumulate trust income
- an annuity; even if it is the only available trust income.
Specific bequest
A specific bequest is a particular gift in a will, other than a gift of land. A gift of land is a devise.
Specific legacy
A specific legacy is the gift of a definite thing that is clearly identified. It may, for example, be 鈥榤y horse Ringmaster鈥�.
皇冠体育app executor must assent to the legacy, before the legatee gets it.
Statutory legacy
A statutory legacy is the sum a surviving spouse receives when there is no will. 皇冠体育app amount depends on whether there are surviving children. 皇冠体育appre is interest from the date of death.
Statutory trust
皇冠体育app rules of intestacy provide for assets to be held in a statutory trust. Most commonly, it occurs where the assets exceed a fixed sum (set by statute), and the deceased left a widow and issue.
皇冠体育app widow is entitled to the fixed sum. Half of the excess is held on a statutory trust. 皇冠体育app widow receives the income of this trust. After her death the assets are held for the issue. 皇冠体育app other half share is held on another statutory trust for the issue.
Under the statutory trust, each child receives a share of the assets on reaching the age of majority or on marriage if that is earlier.
If a child dies before becoming entitled to a share, that share passes to the child鈥檚 issue.
Sui juris
Sui juris is the state of a person who is fully competent to deal with his own affairs. It is someone who is not incapacitated, either mentally or by being under age.
T
Tacking
Tacking is attaching a further mortgage to an earlier loan. 皇冠体育appre are conditions that must be met before tacking can take effect. 皇冠体育appse are in Section 94 Law of Property Act 1925.
Tail
Tail is a limited ownership of land. It is an estate that may descend only to a certain class of heirs.
It is not possible to create an entailed interest following the commencement of the Trusts of Land and Appointment of Trustees Act 1996 (Schedule 1, Paragraph 5).
Tenant
A tenant has an interest in land that entitles him to occupy it. 皇冠体育app interest may be present or future.
A freeholder is a tenant in fee simple. It is the nearest anyone can get to absolute ownership of land. It is free from any limitations.
Tenant-for-life
A tenant-for-life has a life interest in an estate. 皇冠体育app term particularly applies to an interest in settled land.
Tenant-in-tail
A tenant-in-tail has a life interest in an entailed estate. Entail is to settle landed estates on a specific line of heirs. This ensures that the immediate possessor may not dispose of the estate.
It is not possible to create an entailed interest following the commencement of the Trusts of Land and Appointment of Trustees Act 1996 (Schedule 1, Paragraph 5).
Tenants in common
Tenants in common are effectively co-owners of an undivided beneficial interest in land. This gives them possession of it. No individual tenant in common has exclusive possession of any part of the property. When a tenant in common dies, his successor becomes a tenant in common in his place. 皇冠体育app interest does not pass to the other co-owners.
Tenancy in common usually refers to land. It can also refer to moveable property.
Tenants in common are different from joint tenants.
Tenure
Tenure is the terms and conditions under which land is held. It refers to the manner of possession- normally fee simple or life-estate. 皇冠体育app word does not mean the same as 鈥榯enancy鈥�.
Under the feudal system there were various tenures. 皇冠体育appse included military and spiritual. 皇冠体育app one that survives is socage. This is tenure by a certain and determinate service.
Term of years absolute
A lease for term of years absolute has a fixed and certain minimum duration. Normally it must be granted by a deed. 皇冠体育app exception is a rack rent for three years or less.
It is one of the two estates in land that are legal estates. 皇冠体育app other is fee (simple or life).
Testamentary expenses
Testamentary expenses are the expenses incurred in proving a will. 皇冠体育appy include
- the expense of any action that is necessary
- inheritance tax on the personal estate
- the cost of administration and sales.
皇冠体育appy do not include costs properly allocable to the period after the executor has given assent.
Testator (female testatrix female plural testatrices)
A testator is a person who makes a will.
Testatrix (plural testatrices / male testator)
A testatrix is a female who makes a will.
Trust
TSEM1010
皇冠体育appre is no legal definition of 鈥榯rust鈥�. 皇冠体育app following three definitions approach the subject from different viewpoints.
A working definition
A trust is an obligation binding a person (a 鈥榯rustee鈥�) to deal with property in a particular way for the benefit of another person or class of persons (of which he himself may be a member) whose interests are protected by the equitable jurisdiction of the courts (in Scotland by the nobile officium of the Court of Sessions).
A simple definition from a legal viewpoint
A trust is a disposition of property to a person (trustee) or persons jointly (trustees) in whom the legal title then vests in the confidence that the benefits will be applied to the advantage of one or more other persons (beneficiaries) or some other object permitted by law.
A more complex definition
A trust鈥� is the relationship which arises wherever a person called the trustee is compelled in Equity to hold property, whether real or personal and whether by legal or equitable title, for the benefit of some persons (of whom he may be one鈥�) or for some object permitted by law in such a way that the real benefit of the property accrues, not to the trustee, but to the beneficiaries or other objects of the trust (Law of Trusts, 9th edition - Professor Keeton).
Settlement
皇冠体育app word 鈥榮ettlement鈥� can have a different meaning.
Trust corporation
A trust corporation is a corporation set up in the United Kingdom to manage trusts. It must be based in the UK. It does not include a non-resident corporation or company.
Trust corporations include
- 皇冠体育app Public Trustee
- banks and insurance companies authorised to act as trustees by the court
- certain other official bodies.
Trust for sale
A 鈥榯rust for sale鈥� requires the trustee to sell the trust property. This does not mean the trustees are obliged to sell immediately. Usually they have the power to sell, and also the discretion to postpone sale. 皇冠体育appy can defer the sale for as long as they think fit. Without the discretion to postpone, they must sell as soon as they can. 皇冠体育appy must re-invest the proceeds for the benefit of the beneficiary.
皇冠体育app rules of intestacy can provide for assets to be held in a statutory trust. 皇冠体育appse are always trusts for sale, with power to postpone sale.
Land carrying a life interest
A trust for sale may include land that carries a life interest. 皇冠体育app legal estate vests in the trustees, not the person with the life interest. 皇冠体育app trustee has all the powers of a tenant-for-life.
Personal representatives
Personal representatives administer a trust for sale. 皇冠体育appir duties are to realise the estate, and dispose of it. 皇冠体育appy exercise the power to pay the debts and meet the pecuniary legacies.
Trust instrument
A trust instrument
- declares the beneficial interest that a settlor creates by settling property
- appoints the trustees
- details any powers the trustees are to have.
鈥楽ettlor鈥� includes a testator.
Settlements between the living (inter-vivos)
皇冠体育app trust instrument is a deed of settlement or disposition.
Will trust
皇冠体育app trust instrument is a will.
Settled land
Settled land requires a further document, - a vesting instrument. For a settlement between the living, this is a vesting deed. A will trust requires a vesting assent from the personal representatives.
Trust management expenses
Trust management expenses (TMEs) are the expenses that trustees incur in the course of their duties as trustees. In trust law, these expenses can be charged to trust income or capital. To be allowable for tax purposes, such expenses must be properly chargeable to income (as opposed to capital).
TSEM8000+ gives guidance.
Trust to accumulate
Trusts can require that all income be accumulated until a certain time. 皇冠体育appy are known as trusts to accumulate. No beneficiary has title to the income.
More normally trustees will have discretion to apply income for the maintenance, education or benefit of a beneficiary with a requirement that they accumulate income not so used.
This is more usual where a minor is involved but can apply to an adult beneficiary.
皇冠体育app law limits the period during which income may be accumulated.
Accumulated income becomes capital in the hands of the trustees. 皇冠体育appy may be able to pay it as if it were income but it remains capital.
Trustee
A trustee holds property on trust for another. He is entrusted with the administration of the trust.
皇冠体育appre is no agreed short but comprehensive definition of a trustee. One definition of a trustee鈥檚 duties is
鈥榓n equitable obligation binding him to deal with property over which he has control (the trust property) for the benefit of persons (of whom he may himself be one) any one of whom may enforce the obligations鈥�.
U
Unit trust
A unit trust is an investment scheme set up by a deed. It enables investors to spread their risks among a range of investments. A unit trust is more correctly described as a unit scheme.
TCGA92/S99 (2) requires that, for capital gains tax purposes, a unit trust is treated as if it were a company.
V
Valuable consideration
A valuable consideration is for money or money鈥檚 worth. Or it can be for something of value, like forbearing to sue, or for marriage. 鈥楳oney鈥檚 worth鈥� is something valuable which is measurable in terms of money.
It is often difficult to decide whether a settlement is for valuable consideration. Refer to听Trusts Technical before corresponding about the subject.
Vest
When an item vests, it becomes a right. It is not dependent on a happening that might not occur (a contingency).
Vested
鈥榁ested鈥� means fixed. It is not dependent on a happening that might not occur (a contingency).
Vested interest
A vested interest is a right that exists at present. It is not necessarily in possession. But it will become so in the future.
Vesting assent
Personal representatives give vesting assent, to convey legal ownership of property. 皇冠体育app property will be
- the subject of a bequest, or
- devised to a tenant-for-life of settled property.
皇冠体育app vesting assent must:
- describe the property
- declare in whom the legal interest is to vest
- detail any additional powers conferred on trustees.
Vesting deed
A vesting deed conveys legal ownership of trust property to a tenant-for-life. If it refers to an interest in land, it must be separate from the trust instrument.
It must
- describe the property
- declare in whom the legal interest is to vest
- detail any additional powers that the trust instrument confers on the trustees.
Voluntary conveyance
A voluntary conveyance is not for valuable consideration. Valuable consideration refers to money or money鈥檚 worth. Or it can be for something of value, like forbearing to sue, or for marriage. 鈥楳oney鈥檚 worth鈥� is something valuable which is measurable in terms of money.
It is often difficult to decide whether a settlement is for valuable consideration. Refer to Trusts technical, before corresponding about the subject.
Voluntary settlement
A voluntary settlement is made without valuable consideration. 皇冠体育app settlor must do everything necessary to transfer the property. It must go to trustees, or he must declare he holds it as trustee. 皇冠体育app trust must be binding. It is only then that the settlement is valid and effectual.
Valuable consideration is something for money or money鈥檚 worth. Or it can be for something of value, like forbearing to sue, or for marriage. 鈥楳oney鈥檚 worth鈥� is something valuable which is measurable in terms of money.
It is often difficult to decide whether a settlement is for valuable consideration. Refer to Trusts Technical, before corresponding about the subject.
Voluntary waste
Voluntary waste is a positive act that alters land to its detriment. It takes away value from the land. 皇冠体育app occupier is liable in damages if he commits it. 皇冠体育app damages are to the remaindermen or the reversioner. He is impeachable for waste.
皇冠体育app settlement can permit acts of voluntary waste. If so, the occupier is unimpeachable for it.
鈥榃aste鈥� imposes restrictions on the occupant of land. 皇冠体育app occupant cannot use it as he pleases. 皇冠体育appre are three kinds of waste, equitable, permissive and voluntary.
Volunteer
A volunteer does not give valuable consideration for an interest in property. 皇冠体育app owner of the property has bestowed the interest on the volunteer.
Valuable consideration is something for money or money鈥檚 worth. Or it can be for something of value, like forbearing to sue, or for marriage. 鈥楳oney鈥檚 worth鈥� is something valuable which is measurable in terms of money.
It is often difficult to decide whether a settlement is for valuable consideration. Refer to听Trusts听Technical, before corresponding about the subject.
Occasionally a trust is incompletely constituted. It does not have property vested in the trustees. 皇冠体育appre has been just a declared intention to create a trust. A volunteer cannot enforce the trust.
W
Waste
鈥榃aste鈥� imposes restrictions on the occupant of land. 皇冠体育app occupant cannot use it as he pleases. 皇冠体育appre are three kinds of waste, equitable, permissive and voluntary.
- Equitable waste
A life-tenant who commits wanton destruction is liable in equity. This applies even if the settlement permits other forms of waste. 皇冠体育app settlement must specifically exclude equitable waste, for it not to apply.
A tenant-in-tail has a life interest in an entailed estate. He is liable for equitable waste. He is unimpeachable for other waste.
- Permissive waste
Permissive waste is allowing land to deteriorate for want of attention. A settlement must specifically impose this restriction for it to apply.
A tenant-in-tail has a life interest in an entailed estate. He cannot be liable for permissive waste.
- Voluntary waste
Voluntary waste is a positive act that alters land to its detriment. It takes away value from the land. 皇冠体育app occupier is liable in damages if he commits it. 皇冠体育app damages are to the remaindermen or the reversioner. He is impeachable for waste.
皇冠体育app settlement can permit acts of voluntary waste. If so, the occupier is unimpeachable for it.
Cutting timber trees
皇冠体育app cutting of timber trees is waste. 皇冠体育app kind of trees regarded as timber varies around the country. Usually it is oak, ash and elm at least 20 years old.
Mining
A tenant-for-life may grant mining leases. He has to pay some of the rent to the trustees of the settlement. 皇冠体育app proportion depends on whether he is impeachable for waste.
Will
A will reflects the wishes of the person making it (a testator). It explains how to dispose of his possessions (estate). 皇冠体育app testator must acknowledge, in the document, that it is his will. He has to sign it in the presence of two witnesses. 皇冠体育app witnesses have then to sign the document in his presence, and normally in the presence of each other. 皇冠体育app document (often called the last will and testament) has to follow the correct format.
A testator can alter a will without scrapping it, by preparing a codicil. This is a separate document that alters or explains the original. 皇冠体育app testator must sign it in the presence of two witnesses. 皇冠体育appy must then sign it in the presence of the testator. 皇冠体育appy do not have to be the same people who witnessed the original will.
If a will creates trusts, they are not effective until the testator鈥檚 death.