The Basic Deed of Trust is a standard declaration of trust which includes a fixed beneficial interest split and explains what to do on sale. It offers a cost effective way to for declaring your intentions for buy to let landlords tax purposes (suitable Form 17 declarations) or for first time buyers wanting a very simple agreement.

Deed of Trust Cost

The deed of trust contains the declaration of trust cost and is available at a Fixed Fee of £299 INC VAT and is drafted within 1 working day of receipt of your intentions.



Frequently Asked Questions

We have created a template deed of trust to help keep the costs down for you and it includes the following clauses:

  • Lists the names of all legal and beneficial owners
  • Declaration of trust confirming how the beneficial interest is held between the joint owners
  • Explains how to share rental income
  • States the individual co-owner's contributions toward outgoings
  • Maintenance obligations
  • Process for transferring beneficial interest between parties (buying each other's beneficial interest)
  • Process for how to sell the property in the future offering right of first refusal to the other co-owners

We can add additional clauses into the agreement to suit your intentions/circumstances however these will be chargeable at our solicitors hourly rate. Email us for a bespoke quote on thelegalteam@parachutelaw.co.uk
The basic deed keeps things simple by focusing on a fixed share in the property and is often used by buy to let landlords or first time buyers. The gain or loss can be shared in one of two ways:

  • a fixed amount such as 50/50 (often landlords have this split for tax purposes and Form 17 declaration); or
  • the return of your original deposit to purchase the property and then sharing any gain or loss in a fixed share such as 50%/50% or 75%/25%.

The basic deed can include a floating share for an additional fee. The floating share increases or decreases in relation to what you pay toward the mortgage repayments, developments and costs of purchase. The end result means that if during the lifetime of the property ownership you pay more money in, then you will get more money out. Click to read more about a floating deed of trust
The Basic Deed of Trust formula cannot be amended. If you wish to have a more complex deed of trust calculator then why not review our Floating Deed of Trust.

If you wish to cancel your instruction following the receipt of your first draft of the deed then you will be liable for the work undertaken until you cancel at our hourly rate of £200 EXC VAT per hour.
Joint tenants means that each legal owner is deemed to own an equal share in the property so any net proceeds on sale are shared equally. When one owner dies the property is automatically transferred to the other joint tenant in equal shares and no one can sell their share without the others’ permission. The legal rights of the surviving parties to a joint tenancy override a will even if the will explicitly leaves the deceased’s share to someone else. Married couples often choose to buy as joint tenants (it is the default position in tax law) so that if either party dies the property still belongs to the surviving party 100% without needing to go through probate.

You cannot have a declaration of trust to state an unequal share of the title as joint tenants because the property trust deed can only be held 100% equally between joint tenants. To own a separate or unequal share you must sever the joint tenancy and own the property as tenants in common. We offer declaration of trust for tenants in common and for joint tenants.
When you pay you mortgage admin fee (sometimes called product fee) up front then the cost of this part of your costs of purchasing the property just like stamp duty and conveyancing solicitors fees.

If you choose to add the mortgage admin fee to your mortgage loan, then this is part of your total mortgage debt. As at day 1 you owe back to the bank the total of the mortgage admin fee and the mortgage loan.

For example, if the purchase price is £200,000, your deposit is £20,000 and the mortgage £180,000. If the mortgage admin fee is £999 and you choose to add this on top of the mortgage then your equity is £19,001 and the total mortgage debt is £180,999.
A deed of trust is a formal legal document that once executed and dated remains enforceable until it is varied using a deed of variation, surrendered using a deed of surrender or the property is sold. If you wish to make a change to the deed then it is more common to surrender the whole deed and then draft a new deed.
You need separate witnesses for each party's signature. The witnesses cannot be:
  1. Relatives; or
  2. Anyone a party to the deed
 
Your signature can be witnessed by:
  1. Friend, neighbour or work colleague who is not a party to the deed
  2. Doctor, solicitor or any other professional who is not a party to the deed
A Protected trust deed is different to a deed of trust. It is used in Scotland where a debtor is insolvent (bankrupt). It enables you to make reduced payments over four years after which your debts are usually written off. In England, Wales and Northern Ireland, the equivalent is an Individual Voluntary Arrangement.

Talk to a solicitor

Get in contact today to get straight talking legal advice from a specialist solicitor about a deed of trust.
 
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