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HMRC internal manual

Trusts, Settlements and Estates Manual

HM Revenue & Customs
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Ownership and income tax: Specific types of property: land and buildings: example 2: sole name - valid declaration of trust

A house is held in the sole name of A, and the Land Registry documents confirm this. The house is rented out, but the rents are received by B, A’s adult daughter.

A submits a written declaration of trust dated 01/06/06 and signed. In it A states ‘I hold the house at 23 Ranley Gardens on trust for my daughter B absolutely’. The declaration (TSEM9520) is valid.

The declaration transfers the beneficial ownership from A to B on 01/06/06 and she is entitled to the rents, and taxable on them, from that date. However, if the daughter was a minor the Settlements legislation may apply so that A would remain taxable on the rents until the daughter reached 18 (see TSEM4300).