Example of a settlement trust:

  • An interest in possession trust is set up (with A as the trustee) and acquires a number of residential rental properties and the beneficiary B is entitled to the rental income.
  • A must pay the LBTT due on the acquisition of the property.
  • A will be named as registered proprietor in the Land Register of Scotland.
  • If the terms of the trust permit, B may pay consideration to A in exchange for the exercise of their power of appointment or discretion vested in them so that the chargeable interest and title both pass from A to B as a natural legal person.
  • B would be liable for the LBTT due on the consideration paid for the acquisition of the chargeable interest.
Last updated: 
15 February 2015
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