Practice Guide 24 – Private trusts of land

Updated: April 2013

Update

This edition of the guide replaces the October 2012 edition. The guidance on applications for cancellation of a Form A restriction at section 7.2 and on applications for entry of a Form A restriction following severance of a joint tenancy at section 9.9 has been amended.

Scope of this guide

This guide gives advice about applications to Land Registry to register transactions involving trustees of land, other than public, ecclesiastical or charitable trustees. It is aimed at conveyancers and you should interpret references to ‘you’ accordingly. Land Registry staff will also refer to it.

1 Abbreviations and terms used

In this guide:

‘conveyancer’ means an authorised person within the meaning of s.18, Legal Services Act 2007 who is entitled to provide the conveyancing services referred to in paragraphs 5(1)(a) and (b) of Schedule 2 to that Act, or a person carrying out those activities in the course of their duties as a public officer. It also includes an individual or body who employs or has among their managers such an authorised person who will undertake or supervise those conveyancing activities (r.217A, LRR 2003)

‘LPA 1925’ means the Law of Property Act 1925

‘LRA 2002’ means the Land Registration Act 2002

‘LRR 2003’ mean the Land Registration Rules 2003; ‘LRAAO 2008’ means the Land Registration Act 2002 (Amendment) Order 2008

‘prescribed clauses lease’ means any lease that is required by r.58A, LRR 2003 to contain the prescribed clauses set out in Schedule 1A, LRR 2003

‘private trust’ means a trust to which the normal perpetuity rules apply (that is one which is not for charitable, ecclesiastical or public purposes)

‘registered estate’ has the same meaning as in the LRA, namely a legal estate, the title to which is entered in the register of title, other than a registered charge

‘registrable disposition’ means a disposition which must be completed by registration, under s.27, LRA 2002

‘standard form restriction’ means one of the forms lettered A to LL set out in Schedule 4, LRR 2003

‘TLATA’ means the Trusts of Land and Appointment of Trustees Act 1996

‘Trustee Act’ means the Trustee Act 1925.

In this guide, the word ‘land’ is used in the sense given it by the LPA 1925, the Trustee Act and the TLATA, so that it includes incorporeal hereditaments such as manors, rentcharges, franchises and profits a prendre¹. An exception to this is in the phrase ‘estate in land’, where it has a narrower meaning which excludes incorporeal hereditaments². The distinction is important in one case – see section 3.1.3 When must trustees apply for a Form A restriction?

¹ S.205(1)(ix), LPA 1925; s.68(1)(6), Trustee Act; s.23(2), TLATA. Contrast the narrower definition in s.132(1), LRA 2002.

² Ss.2(a) and 132(1), LRA 2002, and compare ss.1(1) and 1(2)(a), LPA 1925.

2 Introduction

2.1 Scope of this guide

This guide gives advice on the land registration aspects of transactions involving trusts of land.

A trust of land is any trust of property that consists of, or includes land, with two exceptions. The exceptions are land that is settled land (as defined in the Settled Land Act 1925) and land to which the Universities and College Estates Act 1925 applies³.

³ S.1, TLATA.

This guide deals only with private trusts of land. It does not deal with trusts for public, ecclesiastical or charitable purposes, with settled land or with land to which the Universities and College Estates Act 1925 applies. For charitable trusts, see Practice Guide 14 – Charities.

From 6 April 2009 the appointment of a new trustee and the partitioning of land held in trust among the beneficiaries are triggers for compulsory first registration. See section 2.5 Compulsory first registration of land held under a trust of land and Practice Guide 1 – First registrations for further information.

2.2 The nature of a trust of land

The essence of a trust of land is that the formal title to the land (the ‘legal estate’) is separated from the underlying ownership (the ‘equitable interest’ or ‘beneficial interest’).

A private trust of land can arise in several ways.

• It may be expressly created in writing⁴.

• It may be a bare trust where the trustee is merely a nominee for a beneficiary of full age.

• It may arise by operation of law either:

⁴ Writing is necessary (s.53(1)(b), LPA 1925).

⁵ Ss.34 and 36, LPA 1925.

⁶ S.33, Administration of Estates Act 1925.

Historically, two or more persons owning land jointly could do so either as joint tenants or tenants in common. Joint tenants do not have specific shares in the land and have a right of survivorship. On the death of one joint tenant, their interest in the land passes automatically to the others. Tenants in common, however, had specific shares, known as undivided shares⁷, which could be transferred separately, and were inherited as part of their estate on their death.

⁷ They became divided shares if the land was partitioned, so that each became the sole owner of part of it. The shares might be equal or unequal.

Since 1925, it has been impossible for a legal estate to be held as a tenancy in common⁸. Joint owners must hold the legal estate as joint tenants, but their beneficial interests may be held either as joint tenants or as tenants in common.

⁸ Ss.1(6) and 34, LPA 1925.

This was intended to simplify conveyancing. Purchasers⁹ of unregistered land from joint owners are not concerned with the beneficial interests. They do not need to know – and are not entitled to know – whether the proprietors of the legal estate hold on trust for themselves as beneficial joint tenants, or as beneficial tenants in common, or on trust for other persons altogether. Provided the purchasers pay the purchase price to at least two trustees of land, the beneficial interests are overreached, and the trust attaches to the proceeds of sale, freeing the purchasers’ estate from it¹⁰.

⁹ This means a person who acquires an interest in or charge on property for money or money’s worth – s.205(1)(xxi), LPA 1925.

¹⁰ Ss.2 and 27, LPA 1925.

Furthermore, if one or more of the joint proprietors has died, a purchaser can safely deal with the survivors in the knowledge that the legal estate has passed automatically to them, whatever may be the case with the beneficial interests. If there is only one survivor, then one or more additional trustees must be appointed so that the beneficial interests can be overreached in favour of a purchaser.

The appointment of one or more additional trustees will trigger compulsory first registration if the legal estate is an unregistered freehold estate or an unregistered leasehold estate with more than seven years to run. See section 2.5.2 The new trustee trigger and Practice Guide 1 – First registrations for further information.

2.3 Beneficial joint tenants

An anomaly arises when two (or more) persons hold the legal estate on trust for themselves as beneficial joint tenants. This situation was unusual in 1925; it is now very common indeed. When the number of joint tenants has reduced to one, they are the sole legal and beneficial owner and the trust has come to an end. But a purchaser will not know this unless the equitable title is deduced – the very problem that the 1925 legislation was designed to avoid. The choice was therefore either to deduce the equitable title, or to appoint a second trustee purely to give a good receipt for the purchase money.

A third, simpler, solution was provided by the Law of Property (Joint Tenants) Act 1964. The survivor is deemed, in favour of a purchaser, to be the sole beneficial owner if:

• they convey as beneficial owner, or the conveyance contains a statement that they are solely and beneficially interested in the property

• no memorandum of severance is endorsed on the conveyance that vested the legal estate in the joint tenants

• no bankruptcy petition or order is registered as a land charge against any of the joint tenants.

At the time this Act was passed, a conveyance ‘as beneficial owner’ imported various standard covenants for title, so the phrase was commonly used. Unfortunately, since 1 July 1995¹¹ the standard covenants for title have been imported by the phrase ‘with full title guarantee’. Care therefore needs to be taken, in unregistered conveyancing, to include, where necessary, a statement that a sole surviving joint tenant is solely and beneficially interested.

¹¹ When the Law of Property (Miscellaneous Provisions) Act 1994 came into force.

2.4 Trusts of land in registered conveyancing

In registered conveyancing, the position is simpler. The register records the ownership of the legal estate, not the beneficial interests, and the registrar is not affected with notice of a trust¹². As far as possible, references to trusts should be kept off the register. A person dealing with the registered proprietors can assume that they have unlimited power to dispose of the estate or charge concerned, free from any limitation affecting the validity of the disposition, unless there is a restriction or other entry in the register limiting their powers, or a limitation imposed under the LRA 2002¹³. So, for example, if two or more persons are registered as joint proprietors, a purchaser can safely acquire the legal estate from the survivor of them, unless there is a restriction to the contrary in the register¹⁴.

¹² S.78, LRA 2002.

¹³ S.26, LRA 2002.

¹⁴ The restriction will normally be Form A – see section 3.1 Form A – the joint proprietorship restriction.

With private trusts, the duty of applying for any necessary restrictions falls on the trustees, though a beneficiary may also apply. The registrar is obliged to enter a restriction without application in only one circumstance, though may do so in certain other cases if it appears to be necessary or desirable¹⁵. The case when the registrar is obliged to enter a restriction is when registering two or more persons as joint proprietors of a registered estate. A Form A restriction must then be entered unless the registrar is satisfied that the applicants hold on trust for themselves as beneficial joint tenants¹⁶.

¹⁵ S.42(1), LRA 2002.

¹⁶ S.44(1), LRA 2002 and r.95(2), LRR 2003. See section 3.1 Form A – the joint proprietorship restriction. The registrar is also obliged to enter restrictions in certain cases involving public or charitable trusts.

There are no Land Registry forms specifically for registering dispositions to or by trustees. The standard forms prescribed in Schedule 1, LRR 2003 must be used. For example, a transfer of the whole of a registered title to or by trustees must be in form TR1. An application to register trustees as proprietors of an estate should be made in form FR1 (if it is a first registration) or form AP1 (if it is a disposition of a registered estate), in the usual way. For general guidance on forms, see Practice Guide 46 – Forms.

2.5 Compulsory first registration of land held under a trust of land

2.5.1 Background

The events that trigger compulsory first registration of title are listed in s.4(1), LRA 2002. See Practice Guide 1 – First registrations for details of these events and guidance on the procedure to be followed when applying for first registration of unregistered land.

From 6 April 2009, two new events that trigger compulsory registration of title to land held under a trust of land were added to the triggers listed in s.4(1), LRA 2002 by the LRAAO 2008. These new triggers are referred to as the "new trustee trigger" and the "partition trigger".

2.5.2 The new trustee trigger

The new trustee trigger applies when an unregistered freehold estate or an unregistered leasehold estate with more than seven years to run is transferred to a new trustee by deed, or by a vesting order under s.44, Trustee Act made in consequence of the appointment of a new trustee¹⁷.

¹⁷ S.4(1)(aa), LRA 2002.

The deed which transfers the legal estate to a new trustee (and any continuing trustees) may be the deed of appointment of the new trustee, if it contains an express vesting declaration or one that is implied under s.40, Trustee Act or a memorandum executed as a deed evidencing the appointment of a new trustee by a resolution to which s.334, Charities Act 2011 applies¹⁸, or it may be a separate conveyance or assignment by deed that is made in consequence of the appointment of a new trustee.

¹⁸ S.334, Charities Act 2011 applies not only to charities, but also, by s.334(6), to any institution to which the Literary and Scientific Institutions Act 1854 applies, although such an institution will often be a charity in any event. See also section 8.2.4 Appointment or discharge of trustees by resolution of the trustees.

A vesting order under s.44, Trustee Act can be made by the High Court or by a county court to vest land in a new trustee appointed by the court under s.41, Trustee Act or out of court.

The new trustee trigger does not apply when an unregistered freehold or leasehold estate held in trust for a trade union or an unincorporated employers’ association (including a federated employers’ association) is transferred on the appointment of a new trustee where s.13, Trade Union and Labour Relations (Consolidation) Act 1992 applies, so that a vesting declaration under s.40, Trustee Act is implied into the instrument in writing, including a written record of a resolution rather than a deed, appointing a new trustee¹⁹.

¹⁹ Ss.13, 129 and 135, Trade Union and Labour Relations (Consolidation) Act 1992.

The new trustee trigger also does not apply on the appointment of a new trustee of a settlement under the Settled Land Act 1925.

2.5.3 The partition trigger

The partition trigger applies on the transfer of an unregistered freehold estate or an unregistered leasehold estate with more than seven years to run that gives effect to the partition of land held under a trust of land among the beneficiaries of the trust²⁰.

²⁰ S.4(1)(a)(iii), LRA 2002.

Partition occurs where land in a trust is divided and the separate parts are allotted among the beneficiaries, so terminating the trust as between some or all of the beneficiaries. Partition may take place at common law by agreement between all the beneficiaries, in which case the trustees, who in many cases will be the beneficiaries themselves, will give effect to the partition by transferring the legal estate in the separate parts to the persons entitled by deed. Partition may also occur when trustees exercise their statutory power to partition land under section 7, TLATA 1996 with the consent of the beneficiaries. Again, the trustees must give effect to the partition by transferring the legal estate by deed.

The partition trigger applies to a partition on whatever terms. For example, the partition may include the payment of equality money where a beneficiary receives more than their beneficial entitlement under the former trust.

3 The standard form restrictions

3.1 Form A – the joint proprietorship restriction

3.1.1 Its purpose and wording

The wording of this restriction is as follows²¹.

"No disposition by a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court."

²¹ Form A, Schedule 4, LRR 2003.

The purpose of the restriction is to ensure that the provisions of s.27(2), LPA are complied with. As amended by TLATA²², this section reads as follows:

"Notwithstanding anything to the contrary in the instrument (if any) creating a trust of land or in any trust affecting the net proceeds of sale of the land if it is sold, the proceeds of sale or other capital money shall not be paid to or applied by the direction of fewer than two persons as trustees, except where the trustee is a trust corporation, but this subsection does not affect the right of a sole personal representative as such to give valid receipts for, or direct the application of, proceeds of sale or other capital money, nor, except where capital money arises on a transaction, render it necessary to have more than one trustee."

²² S.25(1) and Schedule 3, paragraph 4.

This means that a Form A restriction should be entered whenever two or more persons are registered as joint proprietors of a registered estate, except where:

• they are beneficial joint tenants (because when only one is left, the trust will have come to an end – see section 2.3 Beneficial joint tenants), or

• they are personal representatives of a deceased sole proprietor, unless that proprietor was a trustee.

A Form A restriction should also be entered whenever a sole proprietor is, or becomes, a trustee of land.

If a Form A restriction is registered, it will generally be necessary for a new trustee or trustees to be appointed before land held by a single trustee on a trust of land can be dealt with in such a way that capital money arises.

3.1.2 When will Land Registry enter a Form A restriction automatically?

We will enter a Form A restriction in the register, without application, whenever we register two or more persons as proprietors of a registered estate in land, unless we are told that they hold the legal estate on trust for themselves as beneficial joint tenants, or we are registering them as personal representatives. We are obliged to do this by s.44(1), LRA 2002 and r.95(2)(a), LRR 2003. Section 44(1), LRA 2002 reads as follows.

"If the registrar enters two or more persons in the register as the proprietor of a registered estate in land, he must also enter in the register such restrictions as rules may provide for the purpose of securing that interests which are capable of being overreached on a disposition of the estate are overreached."

R.95(2)(a), LRR 2003 provides that the restriction will be Form A.

S.27(2), LPA 1925 does not affect the right of a sole personal representative as such to give a valid receipt for capital money. Therefore a Form A restriction will not automatically be entered when registering personal representatives (or a sole personal representative) as proprietors of land. If there is an existing Form A restriction, however, it will remain in the register. This is because, in that case, the personal representatives are in effect succeeding the deceased as trustees of the trust. For the same reason, we will enter a Form A restriction on first registration when registering the personal representatives of a deceased proprietor who was a sole trustee or (unless the survivor of beneficial joint tenants) the last surviving trustee.

Similarly s.27(2), LPA 1925 does not affect the right of the survivor of beneficial joint tenants to give a valid receipt for capital money.

When applying to register joint proprietors of an estate, you should therefore make clear the capacity in which they hold it. See section 5.4 Declaration of trust. If you do not do so, we will enter a Form A restriction by default.

We will not enter a Form A restriction in respect of a registered charge. Although a charge can be held on trust, the survivor of the registered chargees is always able to give a valid receipt for the money secured by it²³.

²³ S.56, LRA 2002.

We will not enter a Form A restriction automatically when registering a sole proprietor.

3.1.3 When must trustees apply for a Form A restriction?

A proprietor of a registered estate must apply for a restriction in Form A in the following circumstances²⁴.

• When the estate becomes subject to a trust of land, other than on a registrable disposition, and the proprietor or the survivor of joint proprietors will not be able to give a valid receipt for capital money. Examples would be if the proprietor executed a declaration of trust, or if a constructive trust arose.

• When the estate is held on a trust of land and, as a result of a change in the trusts, the proprietor or the survivor of joint proprietors will not be able to give a valid receipt for capital money. An example would be where one of two beneficial joint tenants served a notice to sever the beneficial joint tenancy.

²⁴ R.94(1), LRR 2003.

An application by one of two or more trustees satisfies the requirement to apply²⁵, although such an application should be made as an application by a person with sufficient interest in the making of the entry²⁶ and be accompanied by evidence of that interest.

²⁵ R.94(9), LRR 2003.

²⁶ R.92, LRR 2003.

If a sole or last surviving trustee of land applies for first registration, or to register a disposition of a registered estate in their favour, they must at the same time apply for a Form A restriction²⁷. This is because s.44(1), LRA 2002 only applies to joint proprietors. The registrar is not obliged to enter a Form A restriction automatically on registering a sole or last surviving trustee.

²⁷ R.94(2), LRR 2003.

S.44(1), LRA 2002 also only applies to registered estates in land. It does not apply when two or more persons are registered as proprietors of a rentcharge, manor, franchise or profit a prendre in gross²⁸. Nevertheless, if the survivor of them will not be able to give a valid receipt for capital money, a Form A restriction will be needed, and you should apply for it.

²⁸ These are not ‘estates in land’. See s.2, LRA 2002 and compare ss.1(1) and 1(2)(a), LPA 1925. Although manors can no longer be the subject of first registration, existing registrations of them remain and can be dealt with.

3.1.4 When may a beneficiary apply for a Form A restriction?

Where a registered estate is held on a trust of land, and a sole proprietor or survivor of joint proprietors (not being a trust corporation) will not be able to give a valid receipt for capital money, any person interested in the estate can apply for a Form A restriction²⁹. Unless the consent of the registered proprietors accompanies the application, the registrar will have to serve notice of the application on them³⁰. The notice will give them 15 business days in which to object³¹.

²⁹ Under s.43(1)(c), LRA 2002 and r.93(a), LRR 2003.

³⁰ The application will be a notifiable one under s.45, LRA 2002.

³¹ R.92(9), LRR 2003.

3.1.5 Previous practice

Before the LRA 2002 and LRR 2003 came into force on 13 October 2003, the equivalent of Form A was Form 62 in Schedule 2, Land Registration Rules 1925. The precise wording of this form varied over the years but its final version was as follows.

"No disposition by a sole proprietor of the land (not being a trust corporation) under which capital money arises is to be registered except under an order of the Registrar or of the Court."

This restriction was entered in circumstances similar to those where a Form A restriction is now entered³². Accordingly, we will treat a restriction in Form 62 as if it were one in Form A.

³² Under s.58(3), Land Registration Act 1925 and r.213(1), Land Registration Rules 1925.

Before 1 January 1997³³, s.27(2), LPA 1925 only applied to estates that were subject to a trust for sale. There may still be estates registered before 1997 that were held on trusts that did not include a trust for sale (for instance, a constructive or bare trust), and where neither a Form A nor a Form 62 restriction has been entered. Either the trustees or the beneficiaries of such trusts may apply to enter a Form A restriction, and would be well advised to do so.

³³ When the TLATA came into force.

3.2 The Form B restriction – where the trustees’ powers are limited

3.2.1 Its purpose and wording

The wording of this restriction is as follows³⁴.

"No disposition [or specify details] by the proprietors of the registered estate is to be registered unless one or more of them makes a statutory declaration or statement of truth, or their conveyancer gives a certificate, that the disposition [or specify details] is in accordance with [specify the disposition creating the trust] or some variation thereof referred to in the declaration, statement or certificate."

³⁴ Form B, Schedule 4, LRR 2003.

The general rule is that, for the purpose of exercising their functions as trustees, trustees of land have all the powers of an absolute owner³⁵. However, under s.8, TLATA, a disposition creating a trust of land can contain provisions limiting the trustees’ powers. Any such limitation needs to be reflected by a restriction in the register in order to protect the rights of the beneficiaries. In the absence of a restriction, a purchaser of a registered estate from the trustees will not need to check whether any necessary consent has been obtained, or that any limitation on the trustees’ powers of disposition has been complied with. The purchaser’s title cannot be questioned even if the trustees exceeded their powers in making the disposition³⁶.

³⁵ S.6(1), TLATA.

³⁶ S.26, LRA 2002.

3.2.2 When must trustees apply for a Form B restriction?

Trustees must apply for a Form B restriction in the following circumstances³⁷.

• In respect of a registered estate, when a declaration of trust imposes limitations on the powers of the trustees under s.8, TLATA.

• Also in respect of a registered estate, when a change in the trusts on which it is held imposes limitations on the powers of the trustees under s.8, TLATA.

• On an application for first registration of a legal estate held on a trust of land, when the powers of the trustees are limited by s.8, TLATA.

³⁷ R.94(4) and (5), LRR 2003.

This applies not only when the legal estate is held by trustees, but also when it is held by the personal representative of a sole or last surviving trustee³⁸.

³⁸ R.94(7), LRR 2003.

An application by one of two or more trustees satisfies the requirement to apply³⁹, although such an application should be made as an application by a person with sufficient interest in the making of the entry⁴⁰ and be accompanied by evidence of that interest.

³⁹ R.94(9), LRR 2003.

⁴⁰ R.92, LRR 2003.

Where a Form A restriction is required (see section 3.1 Form A – the joint proprietorship restriction), it will be needed as well as the Form B restriction.

3.2.3 When may a beneficiary apply for a Form B restriction?

Where a registered estate is held on a trust of land, and the powers of the trustees are limited by s.8, TLATA, any person interested in the estate can apply for a Form B restriction⁴¹. Unless the consent of the registered proprietors accompanies the application, the registrar will have to serve notice of the application on them⁴². The notice will give them 15 business days in which to object⁴³.

⁴¹ Under s.43(1)(c), LRA 2002 and r.93(c), LRR 2003.

⁴² The application will be a notifiable one under s.45, LRA 2002.

⁴³ R.92(9), LRR 2003.

3.2.4 What wording should be used for a Form B restriction?

In many cases, the limitation on the trustees’ powers will not apply to all dispositions, but only those of a certain kind. In such cases, the word ‘disposition’ may be replaced with ‘transfer’, ‘lease’ or ‘charge’. It should not however be replaced with a more complex provision, for example ‘lease for a term of more than 21 years’⁴⁴.

⁴⁴ R.91A(8), LRR 2003.

You should not specify the nature of the consents required, or any similarly complex provision in the restriction. The restriction contains the qualifying words "unless one or more of them makes a statutory declaration or statement of truth, or their conveyancer gives a certificate, that the disposition [or specify type of disposition] is in accordance with...". The purpose of this is to allow the restriction to reflect the terms of the disposition creating the trust without requiring the registrar to consider those terms or whether they have been complied with.

The normal way of complying with the restriction will be to supply a certificate by the proprietors’ conveyancer. A statutory declaration or statement of truth will only be needed if the conveyancer is unwilling to give a certificate for any reason or if no conveyancer is acting.

3.3 The Form C restriction – where the powers of a personal representative are limited

3.3.1 Its purpose and wording

The wording of this restriction, which applies to personal representatives, is as follows⁴⁵.

"No disposition by the personal representative of [name] deceased, other than a transfer by way of assent, is to be registered unless such personal representative makes a statutory declaration or statement of truth, or their conveyancer gives a certificate, that the disposition is in accordance with the terms of

[choose whichever bulleted clause is appropriate]

• the will of the deceased [as varied by [specify date of, and parties to, deed of variation or other appropriate details]]

• the law relating to intestacy as varied by [specify date of, and parties to, deed of variation or other appropriate details]

or some [further] variation thereof referred to in the declaration, statement or certificate, or is necessary for the purposes of administration."

⁴⁵ Form C, Schedule 4, LRR 2003.

For the purpose of exercising their functions as trustees, and without prejudice to their functions for the purposes of administration, TLATA confers on personal representatives all the powers of an absolute owner⁴⁶.

⁴⁶ Ss.6(1) and 18, TLATA.

However, under ss.8 and 18, TLATA, the powers of the personal representatives can be limited by provisions contained in the will of the deceased or in a deed of variation or family arrangement. Any such limitation needs to be reflected by a restriction in the register in order to protect the rights of the beneficiaries. In the absence of a restriction, a purchaser of a registered estate from trustees is not concerned to see that the terms of the will or deed have been complied with⁴⁷.

⁴⁷ S.26, LRA 2002.

3.3.2 When must personal representatives apply for a Form C restriction?

A personal representative of a deceased person who holds a registered estate on a trust of land arising under the deceased’s will, or on intestacy, and whose powers are limited under s.8, TLATA, must apply for a Form C restriction⁴⁸. This is in addition to any Form A restriction that may be required.

⁴⁸ R.94(3), LRR 2003.

An application by one of two or more personal representatives satisfies the requirement to apply⁴⁹, although such an application should be made as an application by a person with sufficient interest in the making of the entry⁵⁰ and be accompanied by evidence of that interest.

⁴⁹ R.94(10), LRR 2003.

⁵⁰ R.92, LRR 2003.

3.3.3 When may a beneficiary apply for a Form C restriction?

If the personal representatives fail to apply for the restriction when they should, any person interested in the due administration of the estate may do so⁵¹.

⁵¹ R.93(d), LRR 2003.

3.3.4 What wording should be used for a Form C restriction?

You may apply for a restriction in Form C with such alterations to the bracketed words as are necessary to fit the circumstances.

As with Form B, the restriction contains the qualifying words "unless such personal representative makes a statutory declaration or statement of truth, or their conveyancer gives a certificate, that the disposition is in accordance with...". The purpose of this is to allow the restriction to reflect the terms of the will or deed concerned without requiring the registrar to consider those terms or whether they have been complied with.

The normal way of complying with the restriction will be to supply a certificate by the personal representative’s conveyancer. A statutory declaration or statement of truth will only be needed if the conveyancer is unwilling to give a certificate for any reason, or no conveyancer is acting.

3.4 Other restrictions

Other restrictions may be applied for voluntarily, either by the trustees or the beneficiaries⁵². If the beneficiaries apply, we will serve notice on the registered proprietors, giving them the opportunity to object – see section 4.2 Who can apply for a restriction?

⁵² Under s.43(1), LRA 2002.

Standard form restrictions that will often be appropriate for trusts are Form N (requiring the consent of a named person) and Form Q (requiring the consent of the personal representatives of a deceased proprietor – as to which see section 9.7 Partnership property)⁵³.

⁵³ Both these forms are in Schedule 4, LRR 2003.

For the circumstances in which the registrar will approve a restriction that is not in one of the standard forms, see section 4.1 Form of application for restrictions.

R.93(b), LRR 2003 specifically permits a person who has a sufficient interest in preventing a contravention of s.6(6) or (8), TLATA, to apply for a restriction to prevent such a contravention.

S.6(6), TLATA forbids the exercise of the trustees’ powers in contravention of, or of any order made in pursuance of, any other enactment or any rule of law or equity.

S.6(8), TLATA forbids the exercise of the trustees’ powers in contravention of any restriction, limitation or condition imposed on their authority to act by any other enactment.

In unregistered conveyancing, a conveyance by trustees of a private trust that contravenes these provisions will nevertheless be valid in favour of a purchaser who has no actual notice of the contravention⁵⁴. In registered conveyancing, a purchaser is only concerned to see that any restriction in the register relating to them is complied with.

⁵⁴ S.16(2), (6) and (7), TLATA.

There are certain limitations on the powers of trustees of land imposed by TLATA with which a purchaser of unregistered estates will not be concerned⁵⁵. Again, in registered conveyancing, a purchaser is only concerned to see that any restriction in the register relating to them is complied with.

⁵⁵ S.16(1) and (7), TLATA. The relevant provisions are ss.6(5), 7(3) and 11(1) of that Act.

4 How to apply for restrictions

4.1 Form of application for restrictions

As this guide explains, you will often need to apply for a restriction when a trust is involved. An application for a restriction must normally be made in form RX1. However, you do not need to use form RX1 if the application is either:

• for a standard form restriction and is contained in the ‘additional provisions’ panel of a transfer or assent form⁵⁶

• a standard form restriction and is applied for in clause LR13 of a prescribed clauses lease or any other lease containing clauses LR1 to LR14 of Schedule 1A, LRR 2003, or

• to give effect to an order of the court made under s.46, LRA 2002⁵⁷.

⁵⁶ TP1, TP2, TR1, TR2, TR4, TR5, AS1, AS2 or AS3. These forms are in Schedule 1, LRR 2003.

⁵⁷ R.92, LRR 2003. In this case you should apply in form AP1.

There are also exemptions for restrictions contained in certain charges.

A standard form restriction is one of the forms lettered A to PP set out in Schedule 4, LRR 2003.

An application for a non-standard restriction must always be made in form RX1 (unless it is ordered by the court under s.46, LRA 2002). The registrar can only approve an application for a non-standard restriction if it appears that:

• the terms of the restriction are reasonable

• applying it would be straightforward and would not impose an unreasonable burden on the registrar⁵⁸.

⁵⁸ S.43(3), LRA 2002.

From 9 January 2006 a lease containing clauses LR1 to LR14 of Schedule 1A, LRR 2003 may be used, at clause LR13, to apply for entry of a standard form restriction. This will include prescribed clauses leases granted on or after 19 June 2006. Form RX1 must continue to be used to apply for entry of a restriction contained in any other lease or for entry of a non-standard form restriction.

4.2 Who can apply for a restriction?

You can apply for a restriction if you:

• are the registered proprietor

• are a person entitled to be registered as proprietor

• apply with the consent of the registered proprietor or a person entitled to be registered as proprietor, or

• have sufficient interest in the making of the entry of the restriction⁵⁹.

⁵⁹ S.43(1), LRA 2002.

If you apply with consent, then you must either:

• arrange for the person(s) consenting to complete panel 11 of form RX1

• lodge the consent with the application, or

• (if you are a conveyancer) certify that you hold the consent⁶⁰.

⁶⁰ R.92(2)(c) and (6), LRR 2003.

If you apply as, or with the consent of, a person entitled to be registered as proprietor, rather than someone who is already registered, then you must either:

• lodge evidence of that person’s entitlement

• (if you are a conveyancer) certify that you are satisfied that that person is entitled to be registered as proprietor, and that you hold the original documents that prove it, or

• (if you are a conveyancer) certify that you are satisfied that that person is entitled to be registered as proprietor, and that an application to do so is pending at Land Registry⁶¹.

⁶¹ R.92(2)(d) and (5), LRR 2003.

In practice, of course, many such applications will accompany an application to register the person concerned as proprietor, and these requirements will automatically be fulfilled.

If you apply on the basis that you have a sufficient interest in the making of the entry, then you must satisfy the registrar that this is the case. You must give details of your interest. We may require you to lodge additional evidence of your entitlement⁶².

⁶² Rr.92(2)(e), 92(3) and 92(4), LRR.

If you apply on the basis that you have a sufficient interest in the making of the entry, and you do not have the consent of the registered proprietors⁶³, then the restriction will be a notifiable one, and we will not be able to complete the application until we have served notice on the registered proprietors⁶⁴. The notice will give the proprietors 15 business days to object⁶⁵.

⁶³ Or the person entitled to be registered as proprietor.

⁶⁴ S.45, LRA 2002.

⁶⁵ R.92(9), LRR 2003.

4.3 Summary

In practice, most applications to which this guide relates will fall within one of three categories.

• Applications by trustees for a standard form restriction accompanying a transfer to the trustees. The application can be made either in the additional provisions panel of the transfer, in form JO, or in form RX1. No additional evidence will be needed.

• Applications in form RX1 by trustees who are, or are applying to become, the registered proprietors. No additional consents or evidence of entitlement will be needed.

• Applications by beneficiaries for standard form restrictions in one of the cases specified in r.93, LRR 2003. Normally, no additional evidence will be required, but the restriction will be a notifiable one, and notice of the application will be served on the registered proprietors, unless they have consented to it.

Practice Guide 19 – Notices, restrictions and the protection of third party interests in the register contains further information on applying for restrictions.

5 Applications to register trustees

5.1 Maximum number of trustees

A private trust of land cannot have more than four trustees. If an attempt is made to vest the legal estate in more than four persons, it will vest in the first four named who are willing and able to act⁶⁶. Therefore, a transfer or other disposition in favour of trustees of a private trust should be to no more than four persons. If it is to more than four you must confirm, when applying to register it, that the first four named are able and willing to act.

⁶⁶ S.34, Trustee Act.

5.2 Execution of the disposition by the trustees

We will not normally return a deed for execution by the disponees. It is for you to ensure that the trustees have executed the document if necessary.

5.3 Name and address of the trustees

You must complete the application form FR1 or AP1, as appropriate, with the full name of each of the trustees, and an address or addresses for service for each of them. Each trustee must give an address for service that is a postal address, either in the United Kingdom or abroad. They may each give up to two additional addresses, which may be a postal address, a box number at a document exchange in the United Kingdom or an email address⁶⁷. However, where there are several trustees you may, if you prefer, have a single ‘care of’ address for service such as that of the trust’s conveyancers.

⁶⁷ R.198, LRR 2003.

A general description of the trustees, such as ‘the trustees of the Alpha Limited Pension Fund’, can be included on the basis that its purpose is to assist in identifying the capacity in which the proprietors hold the property. It should not be regarded as giving notice of the trusts on which an estate is held, since that would be contrary to the principles on which the register is kept⁶⁸. In certain cases, Land Registry practice used to be to register trustees under a collective title of this kind, rather than in their individual names. This practice was abandoned several years ago, and the names of the individual trustees will now always be entered in the register.

⁶⁸ S.78, LRA 2002.

5.4 Declaration of trust

All the prescribed transfer and assent forms, and prescribed clauses leases, include a ‘declaration of trust’ panel for use where the disposition is in favour of joint proprietors. For example:

"Declaration of trust. The transferee is more than one person and  they are to hold the property on trust for themselves as joint tenants  they are to hold the property on trust for themselves as tenants in common in equal shares  they are to hold the property on trust:"

For first registrations, there is a similar panel on form FR1. The conveyance or transfer to the applicants should also contain an appropriate declaration.

For adverse possession of registered land, there is a similar panel in form ADV1.

For a new lease of registered land the form of application (AP1) contains no panel to specify the trusts. It is therefore essential that a lease in favour of joint proprietors contains an appropriate clause declaring them or, if the lease contains the clauses set out in Schedule 1A, LRR 2003, clause LR14 is completed.

Failure to complete the relevant panel in a transfer, assent, form FR1 or ADV1 or clause LR14 will mean that the registrar will enter a Form A restriction by default, unless the application is accompanied by a completed form JO.

Form JO, which may be downloaded from our website at www.landregistry.gov.uk, has been introduced as a voluntary form promulgated by the registrar under the power in s.100(4), LRA 2002. It is designed as an alternative means for joint owners to declare trusts at the time of acquisition and to address the practical difficulties that conveyancers might face in securing execution of the transfer by each transferee within the condensed timescale of a normal conveyancing transaction.

Form JO, if completed, must accompany an application for registration of the disposition (in form TP1, TP2, TR1, TR2, TR5, AS1, or AS3) to which it relates. We will also accept a form JO as an alternative to completing panel 9 in forms FR1 or ADV1 or clause LR14 in a prescribed clauses lease.

If panel 5 of the form JO is completed it must also be signed by each of the joint owners, or if panel 6 is completed it must also be signed by a conveyancer. See Public Guide 18 – Joint property ownership – Appendix D and E.

The purpose of making a declaration as to the nature of the trust is not to give the registrar notice of the trusts under which the land is held, but simply to enable us to decide whether we need to enter a Form A restriction (see section 3.1 Form A – the joint proprietorship restriction).

It also serves as a memorandum of the trusts on which the property is held. Although details of the trusts will not appear in the register, the transfer or lease will be returned to the applicant on completion of the registration, if it is requested and a certified copy of it is supplied. Alternatively, an official copy can be obtained of any original or copy lease or transfer, and any of the other documents relating to the application to register the disposition, held by the registrar⁶⁹.

⁶⁹ Subject to rr.131-140, LRR 2003. See Practice Guide 11 – Inspection and applications for official copies and Practice Guide 57 – Exempting documents from the general right to inspect and copy.

Where you use the third box, you must complete it to indicate the capacity in which the trustees hold the land. For example:

• on trust for themselves as tenants in common in the following shares (specify shares).

The shares should be specified. If the phrase ‘as tenants in common’ is used without further information, it will not be clear whether income and capital receipts are to be shared equally, on the basis of the maxim ‘equality is equity’, or in such shares as the trustees may appoint. If you intend the latter, a separate declaration of trust should be executed containing appropriate directions as to the basis on which a division is to be made

• on trust for the members of (unincorporated association) to be dealt with according to its rules.

This wording creates a bare trust for the members of an unincorporated association, but subject to any contract between the members created by its rules. Unless the association’s objects are exclusively charitable, a trust for the purposes of the association will be invalid and should be avoided

• on the trusts of a trust deed (or as the case may be) dated (etc).

This wording is suitable when the trusts are set out in a trust deed, partnership deed, will or other document. You should do this if the terms of the trust are complex or if you wish them to remain confidential. Any person may apply to inspect, or ask for an official copy of, a document held by the registrar and received by the registrar after 13 October 2003, unless it has been designated an exempt document. Generally, if a document has been made an exempt document, only an edited version of the document omitting the sensitive information will be open to inspection or copying. It may still be possible for someone to inspect or request a full copy of an exempt document under the provisions of the Freedom of Information Act 2000. If no other aspect of the transfer is confidential, it will be simpler to set out the terms of the trust in a separate deed than to apply for exemption. The deed (or other document creating the trust) does not need to be lodged with the application.

5.5 Applications for restrictions

In certain cases you will need to apply for a restriction, either in the transfer, lease or assent to the trustees or in form RX1. See sections 3 The standard form restrictions and 4 How to apply for restrictions.

6 Dispositions by trustees and personal representatives

6.1 Compliance with restrictions in the register

Any restriction in the register must be complied with before a disposition can be registered.

6.1.1 Form A restriction

If a sole or sole surviving proprietor is registered with a Form A restriction, and capital money arises under the disposition, you will need to appoint one or more new trustees to join in the disposition. See section 8.2 Appointment and discharge of trustees.

If, however, that proprietor has become the sole beneficial owner, you could instead apply to cancel the restriction. See section 7.2 Applications to cancel restrictions.

If the disposition is one under which no capital money arises, for example a rack rent lease, then the Form A restriction will not prevent registration.

6.1.2 Form B and Form C restrictions

A restriction in Form B or Form C will be satisfied by providing the appropriate certificate or statutory declaration.

6.1.3 Where there is difficulty complying with a restriction

If the disposition creating the trust calls for the consent of a minor, the trustees should instead obtain the consent of a parent who has parental responsibility for the minor (within the meaning of the Children Act 1989) or a guardian⁷⁰.

⁷⁰ S.10(3)(b), TLATA.

If the disposition creating the trust requires the consent of more than two persons to a disposition and it is not possible to obtain the consent of all of them, but two of the necessary consents can be provided, this is sufficient in favour of a purchaser⁷¹.

⁷¹ S.10(1), TLATA.

In some cases of difficulty it may be appropriate to apply to the registrar for an order under s.41(2), LRA 2002, disapplying or modifying the restriction in respect of a particular disposition or kind of disposition. You must apply on form RX2. You will need to:

• state whether you are applying to disapply or modify the restriction, and, if the latter, give details of the modification requested

• explain why the applicant has sufficient interest in the restriction to make the application

• give details of the disposition or kind of disposition that will be affected

• state why the registrar should make the order⁷².

⁷² R.96, LRR 2003.

We will serve notice of the application on any other persons who appear to have an interest in the restriction. If the registrar makes an order, we will enter a note of its terms in the register.

6.2 Powers of attorney granted by trustees

There are several statutory provisions enabling trustees to delegate their functions, individually or collectively. For details of these and associated Land Registry requirements, see Practice Guide 9 – Powers of attorney and registered land.

One point is worth emphasising here. Under s.9, TLATA, the trustees, acting jointly, can delegate their functions to a beneficiary or beneficiaries by means of a power of attorney. But the attorneys cannot give a valid receipt for capital money, even if they are two or more⁷³. If capital money arises on a disposition, the trustees (or their individual attorneys appointed under s.25, Trustee Act) will have to execute it to give the receipt. Usually, therefore, there will be little point in the attorney executing it as well. An attorney under s.9, TLATA can however execute a disposition under which no capital money arises, such as a rack rent lease.

⁷³ S.9(7), TLATA.

7 Cancellation and withdrawal of restrictions

7.1 Automatic cancellation of restrictions

In certain circumstances, we will automatically cancel a trust restriction when registering a transfer⁷⁴. In all other cases, the restriction will remain unless a specific application is made to cancel it (see section 7.2 Applications to cancel restrictions). Voluntary restrictions, such as those requiring the consent of a named person, will never be cancelled automatically.

⁷⁴ Under r.99, LRR 2003.

A Form A restriction will be cancelled automatically on registration of either:

• a transfer on sale by two or more proprietors or a trust corporation (except where the transfer is to one, or more, of the existing proprietors), or

• a transfer by a registered chargee under its power of sale.

A Form B restriction will be cancelled automatically on registration of either:

• a transfer on sale by the proprietor(s), when a certificate or statutory declaration has been provided in accordance with the terms of the restriction, or

• a transfer by a registered chargee under its power of sale.

A Form C restriction will be cancelled automatically on registration of either:

• an assent by a personal representative in form AS1 or AS3

• a transfer on sale by a personal representative, when a certificate or statutory declaration has been provided in accordance with the terms of the restriction, or

• a transfer by a registered chargee under its power of sale.

7.2 Applications to cancel restrictions

When a restriction is no longer required, you can apply to cancel it under r.97, LRR 2003. The application must be made in form RX3, and must be accompanied by evidence to satisfy the registrar that the restriction is no longer required. If the registrar is so satisfied, the restriction must be cancelled.

The circumstances when such an application might be made include:

• when a Form A restriction is registered, but a sole or sole surviving proprietor has become the sole beneficial owner. Evidence, by way of statutory declaration or statement of truth⁷⁵, of the equitable title should accompany the application. This should show how the interest protected by the restriction has ended or devolved to the registered proprietor, that nobody else has a beneficial interest in the land and that no beneficial interest in the property has been encumbered (other than by a charge which is also a charge of the legal estate). Instead of a statutory declaration or statement of truth, we will accept a certificate to this effect from the conveyancer acting for the surviving proprietor if they are able to speak from personal knowledge of the facts.Alternatively a court order requiring the registrar to cancel the restriction may be lodged.

  ⁷⁵ See Practice Guide 73 – Statements of truth.

• when a Form A restriction is registered but, as a result of a change in the trusts, the registered proprietors have become entitled as beneficial joint tenants. Again, evidence of the equitable title will be required

• when a Form B or C restriction is registered but, as a result of a change in the trusts, the powers of the trustees are no longer limited under s.8, TLATA. Evidence of the variation of the trusts – usually a deed or a court order – will be required, or

• certain restrictions registered before 1997 may have been rendered wholly or partially obsolete by section 6(1), TLATA, which gives trustees of land, for the purpose of exercising their functions, all the powers of an absolute owner.

To cancel the restriction, you will need to satisfy the registrar that there is no limitation on the powers of the trustees by virtue of s.8, TLATA, and that any disposition will not contravene the provisions of s.6(6) or 6(8) of that Act. In some cases it may be possible to cancel the restriction if the trustees apply to replace it with a Form B restriction. In other cases, it may be more appropriate to apply to modify it under s.41(2), LRA 2002.

7.3 Applications to withdraw restrictions

A restriction can be withdrawn, under r.98, LRR 2003, with the consent of all persons who have an interest in it unless the restriction is one that comes within r.98(3), LRR 2003.

Restrictions in Form A, B or C will often come within r.98(3)(b) or (c) and so will usually not be capable of being withdrawn. Application may however be made to cancel these restrictions on the grounds that they are no longer required. See section 7.2 Applications to cancel restrictions.

A voluntary restriction associated with a trust, for example one requiring the consent of a named beneficiary, may be withdrawn. In that case, the consent of the beneficiary concerned would be required.

For further information on cancellation and withdrawal of restrictions, see Practice Guide 19 – Notices, restrictions and the protection of third party interests.

8 Change of trustees

8.1 Keeping names and addresses up to date

It is important for trustees to keep their names and their addresses for service in the register up to date. If they do not, they may not receive notices served by Land Registry or others. This may have serious consequences. For example, it may allow a squatter to acquire title under Schedule 6, LRA 2002.

8.2 Appointment and discharge of trustees

8.2.1 Using a transfer

This is the simplest way to register new trustees, but requires the cooperation of all the outgoing ones.

A form TR1 or TR5 can be used instead of a traditional deed of appointment of a new trustee or a conveyance or assignment that is made in consequence of the appointment of a new trustee of unregistered land that will lead to compulsory first registration under the new trustee trigger⁷⁶. See section 2.5.2 The new trustee trigger for further details and Practice Guide 21 – Using transfer forms for less straightforward transactions.

⁷⁶ S.4(1)(aa)(i), LRA 2002.

The existing trustees or registered proprietors should execute a transfer, using form TR1 or TR5, to the continuing and new trustees. A transfer used purely to effect the appointment of new or additional trustees does not require a land transaction return certificate or self-certificate. None of the statements in the consideration panel should be completed. The additional provisions panel of the transfer should state: ‘This transfer is made for the purpose of giving effect to the appointment of new trustees.’

You can use a transfer either in place of, or in addition to, a separate deed of appointment or discharge. If you have used a separate deed, your statement in the additional provisions panel of the transfer can be in words such as: ‘This transfer is made pursuant to a deed of appointment of new trustees dated today.’ We will not normally need to see the deed of appointment.

The transfer must be by all the outgoing proprietors to all the continuing and new proprietors. Suppose, for example, that A, B and C are the existing trustees, and that C is retiring and being replaced by D, who will be trustee jointly with A and B. A, B and C must be shown as the transferors and A, B and D as the transferees. A, B and C must all execute it.

Form A restrictions can be ignored, as capital money does not arise, but other restrictions against the registration of dispositions or transfers may need to be complied with.

8.2.2 Using a deed of appointment

Under s.40, Trustee Act, a deed of appointment or retirement, which meets certain conditions, automatically vests the trust property in the new and continuing trustees. If the land is unregistered, the deed of appointment will, if dated on or after 6 April 2009, be a trigger for compulsory first registration⁷⁷.

⁷⁷ S.4(1)(aa)(i), LRA 2002.

If the trust property is a registered estate or a registered charge, this transfer by operation of law has to be completed by registration⁷⁸.

⁷⁸ S.27(5), LRA 2002.

If the property is not registered you must apply in form FR1:

• enclosing the original deed. If you want it returned you must supply a certified copy

• showing a good root of title

• enclosing evidence to satisfy the registrar that the persons making the appointment or effecting the retirement are entitled to do so.

If the property is registered you must apply in form AP1, enclosing:

• the original deed. If you want it returned, you must request this on the form AP1, and you must also supply a certified copy

• evidence to satisfy the registrar that the people making the appointment or effecting the retirement are entitled to do so. A certificate to that effect by a conveyancer acting for them will be accepted as evidence⁷⁹.

⁷⁹ Rr.161(3) and 203, LRR 2003.

Cases where this would be the best way to proceed include the following. In each case, a certificate by the conveyancer acting for the persons making the appointment, or effecting the retirement, can be lodged instead of the evidence referred to either:

• where the power of appointing new trustees is vested in someone other than the existing trustees (for example, in the settlor). You will need to lodge a certified copy of the trust instrument containing this power

• where a trustee has been dismissed or replaced under a power contained in the trust instrument. You will need to lodge a certified copy of the trust instrument containing this power, or

• where a trustee has been replaced under s.36(1), Trustee Act, on the grounds that they have remained out of the United Kingdom for more than 12 months, refuses to or is unfit to act in the trust, or is incapable of doing so⁸⁰, or is an infant. You will need to lodge a statutory declaration proving the relevant facts. See further, sections 9.2 Bankruptcy and 9.5 Mental capacity.

⁸⁰ A corporation that has been dissolved is incapable of acting in the trust: s.36(3), Trustee Act.

An appointment or discharge containing an express or implied vesting declaration must normally be by deed, but occasionally an instrument in writing will suffice⁸¹. It does not usually have to be executed by trustees who are removed against their will⁸². However, we will generally serve notice on any existing registered proprietor who is not a party to the document, before we complete the application⁸³.

⁸¹ See, for example, s.13(2), Trade Union and Labour Relations (Consolidation) Act 1992.

⁸² See Re Stoneham Settlement Trusts, [1953] Ch. 59.

⁸³ Under r.17, LRR 2003.

Where land is held under a lease that contains a provision against alienation without consent, a deed of appointment or retirement will not operate to vest the land in the trustees unless the necessary consent has been obtained⁸⁴ A certified copy of the consent should accompany the application.

⁸⁴ S.40(4)(b), Trustee Act.

Form A restrictions can be ignored as capital money does not arise, but other restrictions on the register against the registration of dispositions may need to be complied with.

8.2.3 Vesting orders by the court

S.41, Trustee Act, enables the court to appoint new trustees. In the case of registered land, such an order must be registered⁸⁵. You should apply in form AP1, enclosing an office copy of the court order⁸⁶. If you want the order returned, you can request this on the form AP1, and must also supply a certified copy⁸⁷.

⁸⁵ S.27(5), LRA 2002.

⁸⁶ R.161(2), LRR 2003.

⁸⁷ S.4(1)(aa)(ii), LRA 2002.

In the case of unregistered land, a vesting order under s.44, Trustee Act made on or after 6 April 2009 that is consequential on the appointment of a new trustee (whether or not that appointment was made by an order under s.41, Trustee Act) will trigger compulsory first registration and an application for first registration must be made⁸⁸. For further information see Practice Guide 1 – First registrations.

⁸⁸ R.203, LRR 2003.

8.2.4 Appointment or discharge of trustees by resolution of the trustees

In certain cases where trustees may be appointed or discharged by resolution of a meeting of the trustees or other persons, a vesting declaration is implied by statute in the memorandum or written record of the resolution⁸⁹.

⁸⁹ See, for example, ss.13 and 129, Trade Union and Labour Relations (Consolidation) Act 1992.

If the trust property is a registered estate or a registered charge, this declaration has to be completed by registration⁹⁰. In many cases it will be simplest to arrange for the existing registered proprietors to execute a transfer to the new or continuing trustees. Alternatively, you can apply to register the implied vesting declaration directly. You must apply in form AP1, enclosing a certified copy of the memorandum or resolution and evidence of the provision under which it operates to vest the land in the trustees⁹¹.

⁹⁰ S.27(5), LRA 2002.

⁹¹ R.161(1), LRR 2003.

If the land is unregistered, a memorandum executed as a deed on or after 6 April 2009 evidencing the appointment of a new trustee by a resolution to which s.334 of the Charities Act 2011 applies will trigger compulsory first registration and an application for first registration must be made⁹². For further information see section 2.5.2 The new trustee trigger and Practice Guide 1 – First registrations.

⁹² S.334, Charities Act 2011 applies not only to charities, but also to any institution to which the Literary and Scientific Institutions Act 1854 applies, whether or not the institution is a charity. See s.334(6), Charities Act 2011.

8.2.5 Death of a trustee

When a trustee has died, an application to remove the name from the register, or to register a transfer to, or a vesting in, new trustees, should be accompanied by evidence of the death⁹³.

⁹³ R.164, LRR 2003.

9 Some particular situations

9.1 Applications by beneficiaries to protect their interest

See the following sections:

3.1.4 When may a beneficiary apply for a Form A restriction?

3.2.3 When may a beneficiary apply for a Form B restriction?

3.3.3 When may a beneficiary apply for a Form C restriction?

3.4 Other restrictions

4.2 Who can apply for a restriction?

9.3 Bare trusts

9.4 Constructive trusts, etc

9.2 Bankruptcy

If one of two beneficial joint tenants becomes bankrupt, the bankruptcy order severs the joint tenancy. The registered proprietors should apply for a Form A restriction, and the trustee in bankruptcy can also do so (as a person interested in the trust). The registrar will not enter one automatically. The trustee in bankruptcy may also apply for a Form J restriction. This will ensure that the trustee in bankruptcy receives notice of any disposition by the trustees.

Although in general the property of a bankrupt vests in their trustee in bankruptcy, this does not apply to property which the bankrupt holds in trust for another⁹⁴. Consequently, when a joint proprietor is declared bankrupt, their beneficial interest (if any) will vest in the trustee in bankruptcy, but their legal estate will not. Any disposition of the legal estate must be executed by the bankrupt and the other trustees, and, if capital money arises, the receipt for it must be given by them, not by the trustee in bankruptcy⁹⁵. Bankruptcy may, however, be a reason for replacing the bankrupt as a trustee⁹⁶.

⁹⁴ S.283(3), Insolvency Act 1986.

⁹⁵ If it is not paid to the trustees the beneficial interests will not be overreached – ss.2 and 27, LPA 1925.

⁹⁶ Under s.36(1), Trustee Act. See Re Barker’s Trusts (1875) 1 Ch D 43, Re Adam’s Trust (1879) 12 Ch D 634.

9.3 Bare trusts

A bare trustee or custodian trustee is obliged to act only on the instructions of the beneficiary. It appears that this limitation is one of the rules of equity in contravention of which the powers conferred by s.6, TLATA, must not be exercised⁹⁷. The rights of the beneficiary should be protected by applying for a Form A restriction – if the application for registration is made by the trustee, r.94(2), LRR 2003 obliges them to apply for this. You may also wish to apply for a restriction in Form N⁹⁸, preventing the registration of dispositions without the beneficiary’s consent.

⁹⁷ S.6(6), TLATA.

⁹⁸ In Schedule 4, LRR 2003.

9.4 Constructive trusts, etc

An implied, constructive or resulting trust is a trust of land. If one arises, the registered proprietor must apply for a Form A restriction⁹⁹. In practice, the proprietor may not be aware that a trust has arisen, or, if they are, they may dispute the fact. The beneficiary can also apply for a Form A restriction¹⁰⁰. Unless applying with the proprietor’s consent, the beneficiary will need to satisfy the registrar that there is a trust. In practice, this will involve completing panel 12 or 13 of form RX1 with sufficient information to do so. This will involve more than a bare assertion that a trust has arisen. You will need to explain the circumstances that have caused it to arise.

⁹⁹ R.94(1)(b), LRR 2003.

¹⁰⁰ Under r.93(a), LRR 2003.

Unless the registered proprietor consents, the restriction will be a notifiable one, and we will send the registered proprietor a notice, giving them the opportunity to object¹⁰¹. See section 4.2 Who can apply for a restriction?. Any resulting dispute will have to be dealt with under s.73, LRA 2002.

¹⁰¹ S.45, LRA 2002.

9.5 Mental capacity

A trustee who lacks capacity may generally be replaced under the provisions of the Trustee Act and TLATA¹⁰². But if they have a beneficial interest in possession in the trust property, they cannot be replaced under s.36, Trustee Act without the leave of the Court of Protection¹⁰³. See also section 8.2 Appointment and discharge of trustees.

¹⁰² S.36(1), Trustee Act and ss.20 and 21, TLATA.

¹⁰³ S.36(9), Trustee Act.

It may not be necessary to replace a trustee who lacks capacity if they have executed an enduring power of attorney or a lasting power of attorney registered under the Mental Capacity Act 2005, provided that they have a beneficial interest in the trust property. In such a case, the attorney can discharge their functions as trustee¹⁰⁴. No other power of attorney will be effective for this purpose. Other powers, even if they apply to functions which the donor has as trustee, are revoked if the donor lacks capacity.

¹⁰⁴ Provided the power is dated on or after 1 March 2000. See s.1, Trustee Delegation Act 1999. In limited circumstances, powers dated earlier can qualify – see s.4, Trustee Delegation Act 1999. But it would seem that the attorney could not join in a delegation of functions to a beneficiary in possession under s.9, TLATA. For further guidance, see Practice Guide 9 – Powers of attorney and registered land.

9.6 Non-charitable unincorporated associations

A variety of unincorporated bodies may fall in this category, such as clubs, societies (including unincorporated friendly societies) and trade unions. Their property is generally vested in trustees, or a trust corporation, in trust for the members of the association. As the trustee or the survivor of the trustees, unless a trust corporation, will be unable to give a valid receipt for capital money, a Form A restriction will be required, and if necessary should be applied for. See section 3.1 Form A – the joint proprietorship restriction.

Sometimes the rules of the association state how the property is to be dealt with. In this case the statement in the declaration of trust panel on the transfer form or form FR1 should refer to the rules. Suitable wording is given in section 5.4 Declaration of trust. You may also wish to apply for a restriction in Form R¹⁰⁵. The wording of this restriction is:

"No disposition [or specify details] of the registered estate [(other than a charge)] by the proprietor of the registered estate [or by the proprietor of any registered charge] is to be registered unless authorised by the rules of the [name of club] of [address] as evidenced [by a resolution of its members or by a certificate signed by its secretary or conveyancer [or specify appropriate details]."

¹⁰⁵ In Schedule 4, LRR 2003.

When applying for a Form R restriction, you need to specify how the registrar will know that the rules of the association have been complied with. A certificate to that effect signed by the club secretary or its conveyancer, or a resolution of the club members, will usually be the simplest method.

You need to consider whether there is any limitation on the powers of the trustees by virtue of s.8, TLATA. For the purposes of that section, the rules of the association are likely to be regarded as the disposition creating the trust. If they contain such a limitation, you must apply for a restriction in Form B, as explained in section 3.2 The Form B restriction – where the trustees’ powers are limited.

You do not need to send us a copy of the rules of the association.

9.7 Partnership property

In some cases, where a registered estate is partnership property, you may wish to apply for a restriction preventing the registration of a disposition after the death of any of the proprietors without the consent of the personal representatives of the deceased. The appropriate restriction is Form Q¹⁰⁶. A Form A restriction will also be needed.

¹⁰⁶ In Schedule 4, LRR 2003.

However, if the partnership agreement expressly requires such a consent to be obtained, the trustees must apply for a restriction in Form B¹⁰⁷.

¹⁰⁷ S.8(2), TLATA and r.94(4), LRR 2003.

9.8 Pension funds

The portfolios of pension funds frequently include registered estates. They will generally be vested in the managing trustees, or in a custodian trustee (sometimes with others) on trust for the managing trustees. Sometimes a corporate trustee plays the role of the managing trustees.

Any application to register the trustees as proprietors of a registered estate should be accompanied by an application for a restriction in Form B if one is required. A Form A restriction will also be required, and if necessary should be applied for – see section 3.1 Form A – the joint proprietorship restriction.

However, if the pension scheme is a public, rather than a private, trust you should say so in the application. In that case, you must supply a copy of the trust deed¹⁰⁸. If the powers of the trustees are limited, you should apply for an appropriate restriction, for example Form B.

¹⁰⁸ R.182(1), LRR 2003.

9.9 Severance of an equitable joint tenancy

If an equitable joint tenancy has been severed, a proprietor must apply in form RX1 for a Form A restriction¹⁰⁹. For straightforward cases of severance by agreement or notice it is simpler to use form SEV.

¹⁰⁹ R.94(1)(b), LRR 2003.

Where the application is made by, or with the consent of, all the proprietors, no difficulty arises. Where possible you should try to obtain the consent of all proprietors.

However, in many cases the joint tenancy is severed by notice as a unilateral act of one of the proprietors, who will make the application alone, without the consent of the other(s). In these circumstances, we will treat it as made under s.43(1)(c), LRA 2002. Panel 12 or 13 of form RX1 should be completed with details of the severance. An application lodged by a conveyancer should be accompanied by either:

• a certificate that they hold the original or a certified copy of the notice of severance, signed by the other proprietor(s) to acknowledge receipt, or

• a certificate that they hold the original or a certified copy and that it was served on the other registered proprietor(s) in accordance with ss.36(2) and 196, LPA 1925.

The application will be one that the applicant is obliged to make under r.94, LRR 2003. Accordingly, it will not be notifiable within the meaning of s.45, LRA 2002. If it is in order, we will complete it without sending the other proprietors a notice giving them the opportunity to object. We will, however, send them a notification when the application has been completed, telling them of the change to the register. A proprietor who considers that no valid severance has taken place, and that the register is therefore incorrect, will be entitled to apply for the register to be altered to correct the mistake¹¹⁰.

¹¹⁰ Under paragraph 5(a) of Schedule 4, LRA 2002.

9.10 Transfer of a share

A disposition that relates only to a beneficial interest, and does not alter the proprietors of the legal estate, cannot be registered. Frequently, however, the proprietors of the legal estate will be changed at the same time.

A common example is where one of two joint proprietors purchases the share of the other. Strictly, this can be regarded as comprising two transactions. In the first, proprietor A sells their beneficial interest to proprietor B. In the second, A and B, as trustees of the legal estate, transfer the legal estate to B, who has now become solely and beneficially entitled to it. You can do this by separate instruments if you wish, and only the latter will need to be registered.

However, it will usually be simpler to use a single document for both aspects of the transaction. You should use a form TR1 (or TR5 or TP1, if appropriate). Both A and B must be shown as transferors, and B as transferee, because it is the transfer of the legal estate that has to be registered. In the consideration panel, you can use the second option to insert a suitable receipt, for example: "The second transferor has received from the transferee for their half share in the property the sum of £X".

On the accompanying form AP1, you should describe the transaction as ‘Transfer of share’.

If there is a Form A restriction in the register, and it is no longer required, you must remember to apply to cancel it using form RX3. It will not be cancelled automatically. See section 7 Cancellation and withdrawal of restrictions.

9.11 Trust corporations

When a trust corporation applies to be registered as sole proprietor of an estate, which it holds on trust, it must apply for a Form A restriction¹¹¹. Although it will be able to give a valid receipt for capital money arising on a disposition, the restriction is needed in case the proprietor ceases to be a trust corporation at any time, or is replaced by another trustee.

¹¹¹ R.94(2), LRR 2003 does not exempt trust corporations.

Where a trust corporation, registered as a sole proprietor with a Form A restriction, enters into a disposition under which capital money arises, it may need to satisfy the registrar that it is a trust corporation. In such a case, a letter from its conveyancer confirming that it is a trust corporation should accompany the application.

10 Enquiries and comments

If you have a particular concern that is not covered by this guide, please contact Customer Support in advance of the transaction – see Contact details. If the transaction is particularly complex, it may be better if you make your enquiry in writing at the Land Registry office that will process your application.

If you have any comments or suggestions about our guides, please send them to:

Central Operations Group
Land Registry
Trafalgar House
1 Bedford Park
Croydon
CR0 2AQ

(DX 8888 Croydon 3)

You can obtain further copies of this and all our guides free from Customer Support or you can download them from our website in English and Welsh at www.landregistry.gov.uk

Remember

• Have you completed the declaration of trust panel in the transfer or assent, or completed a form JO?

• If you are applying for first registration, have you completed the declaration of trust panel on form FR1 or completed a form JO?

• If you are applying for adverse possession of registered land and there are joint owners, have you completed the declaration of trust panel on form ADV1 or completed a form JO?

• If you are applying to register a lease out of a registered estate, have you completed the declaration of trust in clause LR14 of the prescribed clauses in the lease, or included a declaration of trust in the lease if it does not contain the prescribed clauses or completed a form JO?

• Do you need to apply for a Form A restriction? If so, have you applied for it either in the transfer, in clause LR13 of the prescribed clauses in the lease, in the assent or in form RX1?

• Are there any limitations on the powers of the trustees that need to be reflected by a restriction? If so, have you applied for it?

• Have you applied for any other restrictions you need?

• Have you complied with any existing restrictions on the register?

• Do you need to apply to cancel a restriction? If so, have you completed form RX3 and enclosed the necessary evidence?

• Have you supplied an address for service for the new proprietors for entry in the register?

• Are the names and addresses of the trustees up to date?

• If you are registering new trustees, have you completed any transfer correctly, and have you applied to register all the new and continuing trustees?