Who owns what - trusts & leases

Princess_007

Can anyone advise please:
Grandfather gifted property to grandchild. Grandchild would probably sell it and blow it all on cola bottles & fizzy orange, so the property is actually transferred to parents who hold it in trust for grandchild. There is a trust document signed by the parents outlining that they hold property in trust for grandchild. Rent received from the property is paid to a separate account in the name of the parents, but this would be the case no matter what since the parents wouldn't be able to access accounts in the name of the child due to our wonderful banking regulations.

So from the PRTB point of view, are the parents the landlords or is the trust, or is it the beneficial owner - the grandchild? Ditto on the income front, who is the income assessed against by Revenue?

We did take legal & accounting advice when this was being set up, but are now getting tied up in knots trying to think through the logistics of this. The whole point of a trust as we understand it is to manage assets on behalf of someone who isn't able to manage it themselves, and this is what's happening, but when you look at it the property is in our name, so what's to stop Revenue deciding that this is actually our property and taxing the income at our marginal rate instead of taxing it at the grandchild's marginal rate?



Thanks

Eric Cartman

i think your going to need to talk to a good accountant about this , my understanding would be that the rental income is in the trust and will be taxed when drawn down in the future, but don't go basing a revenue decision on my opinion without talking to a pro.

The_Morrigan

Banks allow for power of attorney to be granted over bank accounts, so the account about be in the name of the child with the parents as signing authorities.

Talk to the bank about changing it.

As for the rest. We don't allow legal advice here and this is too specific to come under the remit of general discussion.