iTrust Landlord
Rental Property & Succession Planning
Key Features of iTrust Landlord
iTrust Landlord is designed for landlords and rental property owners who want to consider their property as part of a wider, coordinated estate plan.
Rental property needs particular care because ownership, mortgages, rental income, refinancing and tax can all affect what planning is appropriate.
Benefits
A Clear Plan for Your Rental Property
Consider how your buy-to-let or investment property should sit alongside your wider family, Will and trust planning.
Planning That Continues Beyond You
Assets and interests that have been properly introduced into a lifetime trust can continue to be administered under the trust rather than becoming part of your personal estate simply because you have died.
Professional Trustee Support
Where iTrust121 Pro Limited is appointed, the professional Trustee provides continuity, administration, record keeping and an independent decision-making framework for trust property.
Mortgage & Refinancing Considerations
Mortgages and secured lending can affect what can be done with a property. Lender security, mortgage consent, available equity and future refinancing should be considered before changes are made.
Tax Considered Before Implementation
Property may contain an unrealised capital gain and changes to ownership can also have other tax consequences. The property should therefore be reviewed individually before any transfer or settlement is completed.
Your Wishes Remain Clear
Your Letter of Wishes can explain how you would like the Trustees to approach your family and property planning while allowing them to respond to circumstances that may change over time.
Rental Property Needs Separate Consideration
A rental property is not the same as a main home or automatically the same as a trading business. Its ownership, mortgage, income and tax position all need to be understood before deciding how it should form part of the estate plan.
Rental Income
Where a fixed-value financial interest is used, that interest should not be confused with transferring the legal title, the rental activity or the rental income.
The treatment of rent depends on the ownership and legal arrangements actually put in place.
Mortgaged Property
A mortgage can prevent or complicate a transfer of legal title. The lender's security continues to have priority and lender requirements should be considered before implementation.
Future Sale or Refinancing
Property planning should allow normal life to continue, but a future sale or refinancing can affect a trust interest and should be reviewed before the transaction completes.
Tax Position
Rental property can involve Capital Gains Tax and other property-tax considerations. The tax effect depends on the property, ownership structure and transaction being considered.
Additional Features
The Right Structure Depends on the Property
iTrust Landlord does not assume that every rental property should be transferred into trust.
The appropriate planning depends on factors including ownership, mortgages, lender requirements, rental income, existing capital gains, Stamp Duty Land Tax and future refinancing.
A buy-to-let or investment property should also not automatically be treated as business property. Any tax relief or business-property treatment needs to be checked separately.
Bring Your Rental Property Into the Wider Plan
Your rental property does not sit in isolation from the rest of your estate.
It should be considered alongside your family, Will, Lasting Powers of Attorney, trust arrangements, mortgages and the other assets you want to pass on.
The aim is to put a coordinated structure in place while keeping the legal, lending and tax position of each property clear.
Getting Started
Speak with an iTrust Adviser about your rental properties, how they are owned, any mortgages and what you would like to happen in the future.
Contact UsFrequently Asked Questions
Can rental property form part of my estate planning?
Potentially.
Rental property requires separate consideration because it produces income and may involve mortgages, refinancing and Capital Gains Tax.
Does the property itself have to be transferred into trust?
Not necessarily.
The appropriate structure depends on the property and your circumstances. Where a fixed-value financial interest is used, it is a separately documented monetary interest and should not be confused with transferring the legal title itself.
Does a fixed-value interest mean the trust receives my rent?
No, not simply because the fixed-value interest exists.
A fixed-value financial interest should not be confused with transferring the legal title, the rental business or the income stream.
What if the property has a mortgage?
The secured lending needs to be considered as part of the planning.
The lender's security continues to have priority and changes to ownership or refinancing may require lender involvement or consent.
Can placing rental property into trust create Capital Gains Tax?
Potentially.
Property may contain an unrealised capital gain. That is why the property should be reviewed individually before any transfer is made.
Can I still sell or refinance the property?
Potentially, yes.
A sale or refinancing may affect the relevant trust interest, so the proposed transaction should be considered before completion.
Is a rental property automatically treated as business property?
No.
Buy-to-let or investment property should not automatically be treated as business property. The individual ownership, activity and tax position need to be reviewed.
Does the trust replace my Will or LPA?
No.
Your Will deals with assets that remain personally owned when you die. Your Lasting Powers of Attorney deal with appropriate personal, financial and property decisions during your lifetime.
Trustees administer trust property. These are separate roles designed to work together.
Important information
Important information: The benefits described are general illustrations of how the relevant iTrust may operate when appropriately structured and funded. Actual legal, tax and asset-protection outcomes depend on individual circumstances, the assets involved, the terms of the trust and any supplemental instruments, effective implementation and applicable law at the relevant time. Trustee decisions remain subject to the trust deed and their legal duties. Tax treatment and protection from third-party claims cannot be guaranteed and specialist advice may be required.
Rental property requires individual review. Ownership, mortgages, lender requirements, rental income, Capital Gains Tax, Stamp Duty Land Tax, refinancing and future sale arrangements can all affect whether and how a property should form part of trust planning.
No particular tax saving, probate outcome, lending outcome or asset-protection result is guaranteed. Where legal, tax, conveyancing, lending or regulated financial advice is required, appropriate specialist advice should be obtained before implementation.
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We offer a wide variety of iTrust options to ensure every client finds the perfect framework for their needs. Whether you require global asset protection or pet care arrangements, there’s an iTrust designed for you. Explore our complete range of iTrust products today and find the solution that best fits your protection and planning goals.