Putting a House in a Trust: Is It Worth It?

Putting a house in trust sounds neat on paper. You might picture your home safely tucked away for the kids, protected from tax, care fees and family drama.

Then you start Googling, see a few horror stories, and stumble on warnings that say things like “Don’t put your house in a trust”. No wonder people feel stuck.

Let’s walk through what a trust actually is, why people think about putting a house in trust, when it can be helpful and when it can backfire. We’ll also look at what happens if you change your mind and want to sell.

What is a trust in simple terms?

In plain English, a trust is a legal arrangement where one person looks after something for someone else. 

The law splits that into three roles:

• The settlor is the person who puts assets in
• The trustees manage those assets
• The beneficiaries are the people who benefit

It’s a way of managing assets like money, investments, land or buildings for people, with different types of trust taxed in different ways.

So if you’re thinking about putting a house in trust, you’re talking about changing who legally owns the property. The house would belong to the trustees, to be used for the benefit of whoever you name in the trust deed.

Why do people put a house in trust?

Most people are trying to solve one or more of these problems:

• Making sure a partner, child or relative is looked after after they die
• Keeping some control over who gets the house and when
• Planning for inheritance tax
• Worrying about future care home fees

Trusts can be used in inheritance tax planning because, if the rules are met, assets in a trust might not be counted as part of your estate when the tax bill’s worked out.

Trusts can also be useful when someone’s vulnerable. A trust can help manage money or property for someone who isn’t able to handle it themselves, with trustees having to act in the beneficiary’s best interests.

On the care side, you’ll sometimes see firms promising that putting a house in trust will “protect it from care fees”. This is where you need to tread carefully.

When is “don’t put your house in a trust” good advice?

There are absolutely times when “don’t put your house in a trust” is the right call.

One big red flag is any company promising that a particular trust will definitely stop the council taking your house into account for care home fees. As Age UK explains, if the council thinks you’ve given your home away to avoid care fees, it can apply “deprivation of assets” rules and treat the property as if it still belongs to you.

Other reasons to be cautious about putting a house in trust include:

• You lose some control, because trustees are the legal owners
• Trusts can come with ongoing tax charges and reporting duties
• Most trusts now need to be registered with HMRC’s Trust Registration Service, which adds another layer of admin

So if your only goal is to hide the house from the council or beat the taxman, there’s a real chance it won’t work and may even make things more complicated than leaving the house out of a trust.

Can I put my house in a trust and still live in it?

This is a very common question, and the good news is that in many cases, yes, you can create a trust where you keep the right to live in the property or receive income from it. 

For example, some people use a type of “interest in possession” or “life interest” trust where a spouse or partner can stay in the home for life, then it passes to children after that. Different trust types are taxed differently and some have specific inheritance tax rules.

However, this is where things get technical. If you give something away but keep benefiting from it, tax rules can treat it as if you never really gave it away at all. Trusts can reduce inheritance tax in some situations, but only if they’re set up correctly, which is why you should always get professional advice.

On the care side, councils can still look at whether you’ve deliberately reduced your assets to avoid paying for care. Giving away property to dodge care charges can still be treated as deprivation of assets, even if you no longer own it on paper.

How to put your house in a trust: the basics

If you’ve weighed things up and still want to explore how to put your house in a trust, it’s worth understanding the basic steps.

Setting up a trust is complicated and it’s best to use a solicitor to avoid costly mistakes.

In very broad terms, you’ll usually need to:

• Decide what you’re trying to achieve and who you want to benefit
• Choose the right type of trust with advice from a solicitor or tax adviser
• Have a trust deed drawn up that sets out the rules and names the trustees
• Transfer the property into the trust, which usually means changing the legal title at the Land Registry so the trustees are shown as owners
• Register the trust with HMRC if it falls within the registration rules

Most UK trusts now need to be registered for tax and transparency reasons, and that trustees can get advice from a solicitor or tax adviser on when and how to do this.

Every one of those steps has legal and tax consequences. That’s why it’s usually better to start with a good will and basic estate planning, then look at trusts as an extra layer for specific situations rather than a default move.

Can putting a house in trust backfire?

Putting a house in trust can seem clever until you need to sell. Suddenly you’re dealing with trustees, legal wording and family opinions before you can even accept an offer. Buyers’ solicitors then want to see the trust deed and understand who has the right to sell and who gets the money.

All of that can slow things down or even stall a sale completely. Instead of a clean move you’re stuck in limbo, trying to balance what the trust says with what you actually need right now.

How Sell House Fast can help you move on

If putting a house in trust has made selling harder, help is at hand to cut through the noise and offer a route to a fast house sale. 

At Sell House Fast we buy homes for cash across the UK and keep the process as simple as possible. We work with you and your solicitor so the trust’s handled properly, while you get a clear offer and a clear timescale.

When you sell to us you get:

• Personal, one-to-one support from a named contact
• A simple, transparent process with no hidden fees
• Fast cash-based sales that can complete in a matter of days
• UK-wide coverage and experience with tricky situations

If you’d like to see what that could look like, get your free, no obligation cash offer. We’ll talk you through your options so you can decide if a quick, certain sale is the right move for you.