I think my mum has been scammed for a trust

[miniworry]

I've just spoken to my mother (age 67) who has informed me that in July she used a company to put her house into trust with both my brother and I as the beneficiaries.

When I asked to see the trust so I could just read through it (my brother doesn't yet own a house so I wanted to see if this affects his qualification as a first time buyer) my mother then informed me that's she's actually had no paperwork at all about the trust, she was just sent forms and then signed them. Apparently the company told her that she doesn't need a copy as they keep all that info here'.

My stomach immediately dropped and I asked her how much she paid ... £4000 🥺 I've since looked at the title documents from the land registry online and I can see that she is still the legal owner.

The company is viva planning and even one look on their website gives me the hunch it's not legit.

She's been scammed hasn't she? What are the immediate steps I can take now? My worry is she has no idea what forms she completed so only knows what she's signed over!

Even if it is legit, it will likely affect your brothers first time buyer status,yes. Also you will pay massive cgt when it is eventually sold.

https://uk.trustpilot.com/review/vivaplanning.co.uk?stars=5

thier trust pilot isn't great and I can't see anywhere on their website that they're FCA registered or have an FCA number. Just a ICO. I wouldn't go near any company that isn't FCA registered.

phone them with your mum when they're open and see what they say. How awful :(

I don't think it's a scam company as they seem to be relatively legit but any finance company that isn't FCA registered is a red flag

I haven't heard of this before but I agree it sounds like a scam

But how did she come across them?
It sounds like she hasn't actually signed anything over but the scam is "just" the £4k payment for them to process nothing.

Does she have any paperwork or email or acknowledgement at all?
How did she pay them?

My mother’s property is in trust. Will that be liable for CGT? I didn’t know this.

Op could you contact your mum's bank and say its a fraudulent payment?? Hopefully they will be able to refund her that way x

Pretend ur ur mum and contact them. Get all the details and paperwork and take it from there

I am her power of attorney for finance so I plan on phoning them first thing Monday morning and I have also drafted a letter.

I've no idea where she found them and I also had no idea that she had even done it. I'm so cross she didn't speak to me about it so I could have read through the paperwork. The likelihood is it's probably been an advert on Facebook that she's seen.

I haven't told her the extent yet of me going onto the land registry and seeing that it's still in her name because she didn't tell me until 9 o clock this evening and I know she won't sleep worrying about it now.

I'm honestly so cross at and for her right now.

What should my plan of action be on Monday- ask that we have a copy of the trust or go straight down the lines of asking for money back for a service not delivered?

Their registered address doesn't even seem to come up on google maps!

@crazeekat that's the trouble- she genuinely has no paperwork other than the first thing they sent to her about what service they offered for trusts. I can obviously get the proof of funds transfer from her bank statements though.

In addition to contacting the company, I would consider (a) trading standards to report the company, and (b) taking legal advice (even if nothing has been done to the title, maybe your Mum needs to update her will to reflect what she thought she was doing).

The strange thing is she told me that she also payed them £1400 to complete the piers of attorney and they have been set up as I've had all the letters from the relevant government department.

Why do one thing but not the other?!

I believe so but you can check with an accountant- it may depend on what type of trust it is.

also, if she has put the property in trust, it would make sense that she is still registered as the legal owner at the Land registry. The trust is about beneficial ownership not legal ownership.

No reputable solicitor would do this. Ifs it’s to avoid care fees it won’t work anyway as it’s clear deprivation of assets.

She can’t have set up LPA without you knowing beforehand as you have to sign the application in her presence and there needed to have been a witness.

What was the aim of putting the property into trust?

If it was to avoid Inheritance Tax, it will not work if she still lives in it. It could even make it worse because leaving assets via a trust does not qualify for the additional nil rate band for leaving property to direct descendants.

Trusts are very complicated from a tax point of view. It depends what type of trust it is and how it has been set up. £4000 is also far too much unless it's a very complicated trust. I would get the paperwork and take it to a trusted solicitor to check it is legit and then an accountant to check the legal implications.

I understood that you only pay CGT on the uplift in the value of the property between becoming part of the trust and selling it. So if it is worth 1m when placed in the trust and you later sell it for 1.1m, capital gains is due on the 100k uplift. By contrast if you had inherited it, you be liable for IHT on everything over the 325k threshold, so on the £775k. So, as I understand it, is financially beneficial to use a trust? I may have that entirely wrong, though!

@Soontobe60 I knew that she had done the LPA as my dad has also set one up. I assumed she had done this through a solicitor and she never mentioned anything about a trust.

She's told me it's so they can't use her house to pay for her care as she wants us to have it. Obviously I would have told her doing this was ridiculous had I known!!

https://www.gov.uk/trusts-taxes/trusts-and-capital-gains-tax

My advice would honestly be get a tax accountant to look at the trust and explain what you need to do and when. A lot of solicitors advise putting property in trust then leave all the implications of that up to the trustees or beneficiaries who often don't understand them.

There is a massive backlog with the land registry at the moment so what you are currently seeing doesn't necessarily mean they haven't submitted the paperwork. It does sound quite dodgy though.

Looking on their website they don't seem to be regulated by any SRA or FCA so how can they actually legally set up a trust?

Did you sign the application form?

There’s something absolutely immoral in trying to avoid paying possible care home fees when you own enough in assets to pay them yourself. Why should tax payers pay just so that someone who hasn’t done anything to earn that money end up with ££££’s?

For the LPA - we recently did this and as Attorney I had to sign paperwork first. You must have signed paperwork for this?