The Changing Face of Trusts: The Trusts of Land and Appointment of Trustees Act 1996

Abstract

Since 1925, the conveyancing device of the trust for sale has become a central part of English land law. One of the main policies of the 1925 legislation had been to promote free alienability of land by making conveyancing easier. The trust for sale was intended as one mechanism to achieve this by separating the legal title from the equitable interests and, by the doctrines of conversion and overreaching, to transfer the equitable interests to the proceeds of sale. It has, however, become increasingly recognised that the mechanism of the trust for sale is both complex and not well suited to contemporary society in which matrimonial and cohabitation co-ownership are becoming increasingly common and where sale is not the primary objective. Equally, the device of the strict settlement of land belongs to a time long gone, when there was a dynastic impulse in aristocratic families to maintain the land in the family for generations to come. Today, the settlement has outlived its purpose and inheritance tax has made it less attractive. The Trusts of Land and Appointment of Trustees Act 1996 (TLATA) has introduced significant reforms in relation to both concurrent co-ownership and successive interests under a settlement of land. It replaces a large part of the 1925 legislative provisions concerning joint ownership of land. It was introduced by the Lord Chancellor as a 'useful measure of law reform', and it has made changes to the law which were long overdue. Although expressed in somewhat technical language, the Act has important implications in the familiar matrimonial and quasi-matrimonial co-ownership situation. This note outlines the changes which have been made by this legislation and addresses some of the issues which it raises.2 Why is the new legislation so important? This question can only be adequately answered by reference to the problems which existed under the 1925 law. First of all, as already indicated, the 1925 legislation relevant to co-ownership was very complicated, even though it was a vast improvement upon pre-1925 law, which was still based on the feudal structure of land law. Second, because of the strictures of the Settled Land Act 1925 (SLA) it was relatively easy to trigger its provisions accidentally, causing unnecessary complications and unintentionally giving to a person the powers of sale of a tenant for life. Third, the trust for sale was appropriate to a time when land was treated as an investment, with the emphasis on its exchange value rather than its use value; hence the nomenclature trust for sale. Today, when we are living in a property owning democracy with a large number of matrimonial and co-habitation homes in co-ownership, such a conveyancing device