Selling Property as a Trustee

When property is held in trust, selling it is not as straightforward as a standard owner-occupier sale. Trustees are bound by fiduciary duties, statutory obligations under the Trustee Act 2000, and the specific terms of the trust deed. Getting it wrong can result in personal liability, tax penalties, or a sale that is set aside entirely.

This guide covers the legal framework for selling trust property in England and Wales, including the different types of trust, the trustee's duty of care, the overreaching requirements, tax implications, and the practical steps involved in the conveyancing process. For related situations involving estate property, see our guide on selling property as an executor of an estate.

Types of trust that hold property

How a sale proceeds depends heavily on the type of trust involved. The three most common types of trust that hold residential property in England and Wales are:

Other trust structures exist — including interest in possession trusts created before 22 March 2006 and trusts arising under a will — but the principles above cover the vast majority of residential property trusts. If you are unsure what type of trust applies, the trust deed will set out the terms, and your solicitor can advise.

The trustee's duty of care under the Trustee Act 2000

The Trustee Act 2000 imposes a statutory duty of care on trustees in England and Wales. Section 1 requires a trustee to exercise such care and skill as is reasonable in the circumstances, having particular regard to:

• Any special knowledge or experience that the trustee has or holds themselves out as having
• Whether the trustee is acting in the course of a business or profession (a professional trustee is held to a higher standard)

When selling trust property, this duty translates into several practical obligations:

• Obtain at least two or three independent estate agent valuations, and consider a formal RICS valuation for high-value properties
• Market the property properly — list on the major portals with professional photographs and an accurate description
• Accept the best offer reasonably achievable, not merely the first offer received
• Document all decisions and the reasoning behind them — this record is your defence if beneficiaries later challenge the sale
• Take professional advice where appropriate, including from solicitors, surveyors, and tax advisers

Professional trustees face a higher standard

If you are a solicitor, accountant, or trust company acting as trustee in the course of your professional practice, the courts will hold you to the standard of a reasonably competent professional in that field. This means that mistakes or oversights that might be forgiven in a lay trustee — such as a family member appointed under a will — are more likely to result in a finding of breach of duty and personal liability when committed by a professional.

Beneficiary consent and the power to sell

Whether trustees need beneficiary consent to sell depends on the type of trust and the terms of the trust deed:

• Bare trust: The beneficiary (if of full age and sound mind) can direct the trustees to sell or to refrain from selling. The trustees must comply. This is the Saunders v Vautier principle.
• Discretionary trust: Trustees generally have the power to sell without individual beneficiary consent, provided the trust deed grants them this power (as most modern trust deeds do). However, trustees must still consider the interests of all potential beneficiaries.
• Life interest trust: The life tenant's co-operation is usually needed in practice, because displacing them from their home without consent will likely require a court order. If the property is sold, the proceeds typically need to be reinvested to provide the life tenant with equivalent income or accommodation.

Where trustees and beneficiaries disagree about whether the property should be sold, either party can apply to the court under section 14 of the Trusts of Land and Appointment of Trustees Act 1996 (TLATA). The court will consider the purposes of the trust, the welfare of any minor beneficiaries, and the wishes of the majority of beneficiaries by value before making an order. For more on court-ordered sales in co-ownership disputes, see our guide on selling a house in joint names.

The two-trustee rule and overreaching

One of the most important conveyancing requirements when selling trust property is the overreaching mechanism under sections 2 and 27 of the Law of Property Act 1925. Overreaching protects the buyer by ensuring that the beneficiaries' equitable interests are automatically transferred from the land to the sale proceeds, provided the purchase money is paid to at least two trustees or a trust corporation.

In practice, this means:

• There must be at least two trustees (or a trust corporation) to give a valid receipt for the purchase money
• If only one trustee survives, a second must be appointed before the sale can proceed
• The buyer's solicitor will refuse to complete unless overreaching is satisfied, because without it the buyer could be bound by the beneficiaries' interests
• Both trustees must sign the TR1 transfer deed

The leading case on overreaching is City of London Building Society v Flegg [1988], in which the House of Lords confirmed that a buyer who pays the purchase money to two trustees takes free of the beneficiaries' interests, even if those beneficiaries are in actual occupation of the property.

Capital gains tax on trust property disposals

Trust disposals of residential property attract capital gains tax at rates that are generally less favourable than those for individuals. The key points for the 2025/26 tax year are:

Allowable deductions when calculating the gain include the original acquisition cost (or the probate value if the property was inherited into the trust), solicitor and conveyancer fees, estate agent commission, and the cost of any capital improvements. Trustees should take specialist tax advice before completing a sale, as structuring the disposal incorrectly can result in significantly higher tax liabilities than necessary.

For a broader view of conveyancing costs that may be deductible, see our guide on conveyancing costs breakdown.

Trust Registration Service

Since 2022, HMRC's Trust Registration Service (TRS) requires most UK trusts to register, including:

• All trusts that are liable to pay UK tax (including CGT on a property disposal)
• All non-taxable trusts that hold UK land or real property

Trustees have 90 days from the date the trust becomes registerable to complete registration. The register must also be updated annually and whenever significant changes occur (such as a change of trustee or a disposal of a major asset). The TRS requires details of the trustees, the settlor, the beneficiaries, and the trust assets. Failure to register can result in penalties of up to £5,000.

If the trust has not been registered and a property sale is planned, registration should be completed as a priority — the buyer's solicitor may raise enquiries about trust registration as part of their due diligence.

Conveyancing requirements for trust sales

The conveyancing process for a trust property sale follows the same broad stages as any residential sale, but with additional requirements that your solicitor must address. Understanding what your solicitor does throughout this process is covered in our guide on what your solicitor actually does.

Documents your solicitor will need

• The trust deed (or will creating the trust) — to confirm the trustees' powers and identify the beneficiaries
• Evidence that at least two trustees are acting (or that the seller is a trust corporation)
• The HM Land Registry title register and title plan
• Any restrictions on the title (such as a Form A restriction indicating a trust of land)
• Confirmation of TRS registration (if applicable)
• Completed TA6 Property Information Form and TA10 Fittings and Contents Form
• A valid Energy Performance Certificate (EPC)
• Evidence of beneficiary consent (for bare trusts) or a record of the trustees' decision to sell (for discretionary trusts)

The self-dealing rule

Trustees are prohibited from purchasing trust property for themselves under the self-dealing rule. A purchase by a trustee is voidable at the election of any beneficiary, regardless of whether the price paid was fair. The only exceptions are where the trust deed expressly permits the purchase, where all adult beneficiaries of full capacity give informed consent, or where the court authorises the transaction. If you are a trustee considering buying the trust property, you must obtain an independent RICS valuation and take separate legal advice before proceeding.

Court orders under section 14 of TLATA 1996

Where trustees and beneficiaries (or beneficiaries among themselves) cannot agree on whether trust property should be sold, any person with an interest in the property can apply to the court under section 14 of TLATA 1996. The court has a wide discretion and will consider:

• The intentions of the person who created the trust
• The purposes for which the property is currently held
• The welfare of any minor who occupies or might be expected to occupy the property as their home
• The interests of any secured creditor (such as a mortgage lender)
• The wishes of the majority of beneficiaries by value

Applications under section 14 typically take six to twelve months to resolve and can cost £5,000 to £20,000 or more in legal fees. Where possible, trustees should exhaust all avenues for negotiation and mediation before resorting to court proceedings. For further detail on court-ordered sales, see our guide on selling a house in joint names, which covers the TLATA process in depth.

Practical checklist for trustees selling property

1. Review the trust deed. Confirm that the trustees have the power to sell and identify any restrictions or requirements (such as beneficiary consent or a requirement to reinvest).
2. Ensure at least two trustees are acting. If only one trustee survives, appoint a second before marketing the property. The buyer's solicitor will not proceed without overreaching.
3. Obtain beneficiary consent where required. For bare trusts, obtain the beneficiary's written direction to sell. For discretionary trusts, record the trustees' decision formally in the trust minutes.
4. Register with the Trust Registration Service. If the trust is not already registered, complete registration before marketing.
5. Obtain professional valuations. Get at least two estate agent valuations and consider a formal RICS valuation for high-value properties or where the duty of care demands it.
6. Instruct a solicitor experienced in trust conveyancing. Not all conveyancers are comfortable with trust sales. Ensure your solicitor understands the overreaching requirements and can handle the additional documentation.
7. Take CGT advice before completion. The trust's annual exempt amount is small (£1,500) and the rates are less favourable than for individuals. Structuring the disposal correctly can make a significant difference.
8. Report and pay CGT within 60 days. Use HMRC's online service to report the disposal and pay any tax due within 60 days of completion.

Sources

• Trustee Act 2000, Section 1 (duty of care) — legislation.gov.uk
• Law of Property Act 1925, Sections 2 and 27 (overreaching) — legislation.gov.uk
• Trusts of Land and Appointment of Trustees Act 1996, Section 14 (court applications) — legislation.gov.uk
• HMRC — Trust Registration Service: how to register — GOV.UK
• HMRC — Capital Gains Tax: trust rates and annual exempt amount — GOV.UK
• HMRC — Report and pay Capital Gains Tax on UK property within 60 days — GOV.UK
• HM Land Registry — Practice Guide 24: Private trusts of land — GOV.UK
• The Law Society — Trusts of land: a practical guide — lawsociety.org.uk
• City of London Building Society v Flegg [1988] AC 54 — House of Lords
• Trustee Act 1925, Section 61 (power of court to relieve trustee from personal liability) — legislation.gov.uk

Related guides

• Selling a House Held in Trust

Frequently asked questions