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Gifting shares in land.

Land, Registered Land, Planning law etc.

Re: Gifting shares in land.

Postby dls » Sat May 09, 2015 7:04 am

Shootist, you are missing that a beneficial interest in land is not itself land. It is what used to be called an interest in the proceeds of sale.

The general law may require nothing formal for the transfer of a beneficial interest, but that does not mean that one is not better done for clarity.

Your example posits 4 shares, but it becomes clearer when you suggest five or more. Five people can hold the legal or beneficial estates, but only four can be registered, so at least one beneficial owner must rely for his own protection on the trust instrument if any, and the restriction on the register.
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Re: Gifting shares in land.

Postby shootist » Sat May 09, 2015 8:14 am

Thanks, that is a little clearer, but my main interest is in the legal ownership of the land rather than any benefit from sale. By legal ownership, in my confused state, I mean those privileges that would normally be considered the rights (or what I might imagine to be the rights) of a sole owner, E.G. the right to actually be on and remain on the land, to have a say in the use to which the land is put, and like issues albeit divided among 4,5, or 6 equal shareholders in ownership. Likewise for any liabilities arising out of ownership of the land. It may be that one owner may wish to give his ownership up to avoid the liabilities that may come with that ownership by giving his share to another. Is my assumption correct?

If I owner freehold on a dozen acres of woodland I could no doubt sell it or give it away. But if I shared ownership with a half dozen owners as tenants in common it seems that I could not dispose of my share to someone else without the consent of all the other five, unless I die, having left my share to another individual. This seems to me to be odd, to say the least.
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Re: Gifting shares in land.

Postby atticus » Sat May 09, 2015 9:52 am

I suggest that you consider the common intention of the common ownership. It seems to me that there is more to this than individual wishes.
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Re: Gifting shares in land.

Postby theycantdothat » Sat May 09, 2015 10:08 am

shootist wrote:Thanks, that is a little clearer, but my main interest is in the legal ownership of the land rather than any benefit from sale. By legal ownership, in my confused state, I mean those privileges that would normally be considered the rights (or what I might imagine to be the rights) of a sole owner, E.G. the right to actually be on and remain on the land, to have a say in the use to which the land is put, and like issues albeit divided among 4,5, or 6 equal shareholders in ownership. Likewise for any liabilities arising out of ownership of the land. It may be that one owner may wish to give his ownership up to avoid the liabilities that may come with that ownership by giving his share to another. Is my assumption correct?

If I owner freehold on a dozen acres of woodland I could no doubt sell it or give it away. But if I shared ownership with a half dozen owners as tenants in common it seems that I could not dispose of my share to someone else without the consent of all the other five, unless I die, having left my share to another individual. This seems to me to be odd, to say the least.


A problem here is that your concept of what amounts to legal ownership is not what the law calls legal ownership.

Without getting into the niceties of what an estate in land is, for practical purposes the legal owners of the land are those persons with whom a buyer of the land deals. Essentially, though subject to reservations which need not detain us, if you buy land from the owners of the legal estate you acquire a good title to it.

When it comes to legal and beneficial owners the distinction is clearly seen where there is what most people regard as a "trust". A typical example would be A and B, both solicitors, holding land on behalf of C, D, E and F. A and B have no personal interest in the land; they are not entitled to live in it or enjoy the income from it. On any sale the buyer deals with A and B. C, D, E and F are entitled to the land according to the terms of the trust and that may mean living in the property or receiving the income and the interest may be enjoyed now or in the future. Each of C, D, E and F is free to dispose of his interest without the consent of the others or A and B, though the terms of the trust may impose some obligation to first offer the share to the other beneficiaries.

The position starts to get confusing where the trustees and the beneficiaries are the same. Whilst where, say, husband and wife own land it is not what most people think of as a trust there is in fact still a trust. There is always a trust where two or more persons own land. Even though trustees and beneficiaries are the same people, you still have to think in terms of them being separate. (Think in terms of John who has a son - he is both a father and a son but that does not make him two distinct persons.) If you do that then cases of joint ownership can be more readily understood.

The legal estate can only be held as joint tenants. That means that if land is held by G and H and G dies the legal becomes vested in H. What happens to the benefical interest depends on whether the benefical interest is held as joint tenants or tenants in common.

If it is held as joint tenants and G dies H is entitled to the whole of the property.

If it is held as tenants in common and G dies then G's interest passes to his estate. However, despite that, the legal estate will, until some further action is taken, be vested solely in H. However, H will not be able to sell until he appoints a new trustee.

So, where land is held by I, J, K and L as tenants in common each of them is free, subject as mentioned above, to dispose of his interest as he thinks fit. If L gives his interest to M then I, J, K and L will hold the land on behalf of I, J, K and M. Ideally, I, J, K and L will convey the leagl estate to I, J, K and M, but that is not essential.
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