Beneficial interest Definition

GLOSSARY

Published by a UU��ֱ�� Property expert

What does Beneficial interest mean?

The holder of a beneficial interest is entitled to enjoy the use of the property in issue although not necessarily being the legal owner of the property.

Once a beneficial interest is established, it would entitle a party to long-term rights in respect of the property notwithstanding that party not being a party to a marriage/civil partnership or being a joint/sole owner of the property.

View the related checklists about Beneficial interest

Checklist for compromises of FCA-regulated entities: information requirements

Checklist for compromises of FCA-regulated entities: information requirements The Financial Conduct Authority (FCA) is the conduct regulator for financial services firms and financial markets in the United Kingdom. It has a duty under section 1B of the Financial Services and Markets Act 2000 (FSMA 2000) to pursue certain objectives, one of which is the consumer protection objective. The FCA lists its statutory objectives as to secure an appropriate degree of protection for consumers and to protect and enhance the integrity of UK financial markets, with a view to reducing the number of proposed compromises that they do not consider to be appropriate (see FG22/4, para 1.2). On 5 July 2022, the FCA published guidance on compromises of regulated firms (see FCA Guidance FG22/4 July 2022 and updated in January 2024) following their significant concerns about these tools being proposed and used by firms to avoid paying customers redress (see: LNB News 05/07/2022 72). Practitioners will need to take note of the guidance where the proposed compromise involves regulated companies, meaning...

Trustees and beneficial ownership information—checklist

Trustees and beneficial ownership information—checklist This Checklist should be read alongside Practice Notes: Trusts—disclosure of beneficial ownership information via the Trust Registration Service (TRS) and record-keeping and Trust Registration Service (TRS). See also Practice Notes: Trust Registration Service (TRS)—table of registration requirements and deadlines and Trust Registration Service (TRS)—trusts excluded from registration. These Practice Notes contain guidance on trustees’ obligations imposed as a result of the implementation (in relation to the registration of trusts) of the EU’s Fourth Anti-Money Laundering Directive Directive (EU) 2015/849 (4MLD) through the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017), SI 2017/692 and the EU’s Fifth Anti-Money Laundering Directive Directive (EU) 2018/843 (5MLD) through the Money Laundering and Terrorist Financing (Amendment) (EU Exit) Regulations 2020 (MLR 2020), SI 2020/991. In this Checklist, references to MLR 2017, SI 2017/692 include the amendments incorporated as a result of MLR 2020, SI 2020/991 coming into effect, unless otherwise stated. Beneficial owners of a trust include the settlor(s), trustee(s), beneficiaries and...

Establishing a beneficial interest (joint ownership)

Where two or more people together own real property, they hold it under a trust of land. Where property is held on a trust of land, the legal estate and equitable estate are separate. The legal estate must be held by the co-owners as joint tenants. The beneficial interest in the property can, however, be held by the co-owners either as:•joint tenants, or•tenants in commonIf the co-owners are joint tenants, each has an indivisible share in the property, where each owns the whole, rather than an identifiable share of the property. The right of survivorship applies so on the death of one joint tenant, the deceased's interest in the property passes automatically to the other(s).Where the beneficial interest is held as tenants in common, interests can be unequal, and the share of one does not pass to the survivor but is part of the deceased's estate.A tenancy in common may arise on the original transfer or conveyance where there is an express declaration of trust, or where an existing joint...

Insolvent estates and bankrupt beneficiaries

Insolvent estates and bankrupt beneficiaries Test of insolvency Section 421(4) of the Insolvency Act 1986 (IA 1986) provides a statutory test to establish whether an estate is insolvent: the estate of a deceased person is insolvent if, when all assets are realised, it will be insufficient to meet in full all the debts and other liabilities to which the estate is subject. An estate is not insolvent if debts and liabilities can be settled even if none of the legacies can be paid. In an insolvent estate, the beneficiaries will receive nothing and the debts and liabilities will not be paid in full, if at all. For example, Elizabeth’s estate contains just one bank account with a balance of £50,000. There is no IHT liability as the estate has the full basic nil rate band available and a funeral plan is in place to meet the funeral costs. The debts and liabilities of the estate amount to £12,000. By her Will, Elizabeth left £40,000 each to The Green Party...

Discover our 389 Practice Notes on Beneficial interest

Memorandum on the responsibilities and obligations of a director of an AIM company

Memorandum on the responsibilities and obligations of a director of an AIM company 1 Introduction 1.1 This memorandum has been prepared for the directors and proposed directors (the Directors) of the Company to provide a general introduction to the principal responsibilities and obligations of a director of a company whose shares are admitted, or will be admitted, to AIM, a market operated by London Stock Exchange plc (LSE). 1.2 Once a company’s securities are admitted to trading on AIM, a company and its directors are subject to an increased layer of regulation. This includes requirements set out in the AIM Rules for Companies published by the LSE (AIM Rules), the Disclosure Guidance and Transparency Rules sourcebook (DTRs), the Prospectus Rules and the Market Abuse Regulation. 1.3 As a Director, you will be responsible (individually and collectively with your fellow Directors) for the Company's compliance with these provisions. The LSE has the power to fine or publicly censure an AIM company in the case of a...

Share purchase agreement—pro-buyer—corporate seller—conditional—long form

Share purchase agreement—pro-buyer—corporate seller—conditional—long form This Agreement is made on [insert day and month] 20[insert year] Parties 1 [Insert name of selling corporate entity] incorporated in [England and Wales OR [insert country of incorporation] OR with registered number [insert company number] whose registered office is at [insert address] (the Seller); 2 [Insert name of purchasing corporate entity] incorporated in England and Wales OR [insert country of incorporation] OR with registered number [insert company number] whose registered office is at [insert address] (the Buyer), and 3 [Insert name of guarantor entity] incorporated in England and Wales OR [insert country of incorporation]] with registered number [insert company number] whose registered office is at [insert address] (the Guarantor) [(each of the Seller, the Buyer and the Guarantor being a Party and together the Seller, the Buyer and the Guarantor are the Parties).] Background (A) The Company (as defined below) is a private company limited by shares and is incorporated in [England and...

Dive into our 64 Precedents related to Beneficial interest

What is the position of a security holder if the company that created the security is dissolved?

What is the position of a security holder if the company that created the security is dissolved? This Q&A focuses on the impact the dissolution of a security provider can have on the ability of a security holder to effectively enforce its security. It also considers the position of a receiver appointed by the security holder prior to the dissolution of the relevant company. Summary If a security provider is dissolved as a matter of English law it is normally still possible for the security holder to enforce the security it holds by exercising the mortgagee’s power of sale. There may be circumstances in any particular case that make an application to restore the dissolved company to the register desirable to protect the security holder’s position. Circumstances where this issue commonly arises The problems associated with a security provider being dissolved while security is in force occur most often in real estate finance and other asset finance transactions. Typically, these issues arise where a special purpose...

What will be the applicable limitation period where a settlement agreement is secured by way of a charging order and the debtor under the agreement subsequently defaults on repayment of the debt, which entitles the creditor to immediate repayment of the whole sum, and the creditor now wishes to enforce their charging order?

What will be the applicable limitation period where a settlement agreement is secured by way of a charging order and the debtor under the agreement subsequently defaults on repayment of the debt, which entitles the creditor to immediate repayment of the whole sum, and the creditor now wishes to enforce their charging order? We have assumed that reference is being made to a charging order. When seeking to enforce the charging order it would have been subject to the previous rules in this area (CPR 73 and CPR PD 73 were amended with the changes coming into force on 6 April 2016). Where such orders charge a beneficial interest under a trust in land, the charge is protected by means of a restriction under the Land Registration Act 2002. We also assume that the charging order was validly obtained. If seeking to apply for an order for sale to enforce a charging order made prior to 6 April 2016 you should still follow the regime set out in the amended...

See the 555 Q&As about Beneficial interest

Inheritance (Provision for Family and Dependants) Act 1975—no award for costs (Jassal v Shah)

Private Client analysis: Costs are the hot topic in litigation under the Inheritance (Provision for Family and Dependants) Act 1975. A striking first-instance judgment, varied without enthusiasm on appeal, gives practitioners something to chew over while they await the Supreme Court’s decision in Hirachand v Hirachand. At first instance, a cohabitee claimant was awarded a half-interest in a property and a lump sum of £385,000, of which £140,000 was a contribution towards their litigation costs. The court then made a nominal order of no order as to costs. On appeal, the provision for costs was set aside, and a ‘traditional’ costs order was made in the claimant’s favour. But the appeal court expressed unease at the artificial separation of costs and award in this litigation. The problems with which the Supreme Court must grapple in Hirachand are plain to see. Written by James McKean, barrister at New Square Chambers.

Common intention constructive trusts and minors—can they be successfully challenged by a trustee in bankruptcy?

Restructuring & Insolvency analysis: Mr Justice Edwin Johnson dismissed a trustee in bankruptcy’s appeal from the decision of Insolvency and Companies Court Judge Jones in which he had determined that a property purchased in the sole name of a father was held under a common intention constructive trust for the benefit of his daughter. In a multifaceted appeal against questions of both law and fact, the court explored the extent to which a minor could enter into agreement and suffer detrimental reliance upon such an agreement so as to give rise to a common intention constructive trust in favour of that minor. Written by James Hannant, barrister at Guildhall Chambers.

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