Back to Basics – Property Protection Trust

25th September 2020Manisha Chauhan39

Property Protection Trusts (PPTs) are by far one of the most common types of trusts included in wills.

The PPT is designed to take the deceased’s share in the home and give someone else (known as the life tenant) a life interest in the property which will give them the protection of living in the property for the remainder of their lifetime or earlier if the trust specifies i.e. remarriage. It also ensures that if the survivor requires long term care, at least half the property is preserved for the benefit of their beneficiaries who are normally the deceased’s children.

These types of trusts are normally used for married couples or civil partners to ensure the share of the home will ultimately pass to the children at the end of the trust period whilst still ensuring the interests of the surviving spouse are protected.

For example, a married couple, who have not been married before want to leave their share of their house to their only child. They currently own the house as joint tenants. Their Estate Planning Consultant would sever the tenancy on the property registering them each as 50% owners. They then have their wills written to represent that if one died, their half of the property would be held on Trust for the benefit of their child but allowing the survivor to live in their share of the property for life or a specified period of time.


Joint Tenants or Tenants in Common?

Considering the point above with regards to severance, when considering a PPT, it is important to be able to distinguish the difference between tenants in common (TiC) and joint tenants (JT). The reason for this is that the property must be held as tenants in common to enter the trust.

What does this mean? To simplify, both TiC and JT refer to how a property is held or owned and this ‘ownership’ is registered with the Land Registry. Traditionally, when houses were purchased, the owners would have been registered as joint tenants. This would have meant that if one tenant died, the other tenant would have inherited the property by virtue of survivorship.

Holding the property as tenants in common means that each owner holds a share of the home which can be gifted via their Will. We would always advise the title is checked as there are occasions where clients may believe the home is held as tenants in common when, upon checking to verify this, the home is in fact held as joint tenants. Obtaining a copy of the title register is a small fee of £3.


When is it set up?

The trust would be set up on the death of the first testator. The legal title will then be transferred into the joint names of the surviving spouse (as an example) and the trustees.

It is important to add here that a property cannot enter a life interest trust on death as until the mortgage has been settled, they are not seen to own the property. The simpler solution would be to ensure that both clients have life cover in place to cover the mortgage on first death. If on death there is still a mortgage on the property and there is nothing in place, the survivor does still have limited options:

  1. They can sell and downsize as the PPT has downsizing provisions; or
  2. A cash loan could be taken out to settle the mortgage.


What is the point of a PPT?

The main reason for a PPT is the protection it provides for the beneficiaries i.e. the children, to ensure they are protected and ultimately receive a share of the home.

If the share of the home is simply gifted to the partner directly, this could cause a number of issues – the main one being sideways disinheritance i.e. the surviving partner remarries and the house passes to their new spouse under the Will. A PPT will enable the partner to stay in the home and will avoid the risk of the partner potentially disinheriting the children.

Likewise, if a share of the home is gifted to the children directly while the spouse or partner has the other share, this could cause issues in that the children may want to force step mum out of the property or insist that she pays rent to remain in the property. A PPT prevents this from occurring and essentially protects both parties’ interest. It is important to add the beneficiaries will only own the share of the home when the PPT ends either due to the death of the life tenant or earlier.


Can the property be sold?

A PPT can include powers allowing the life tenant to downsize and use the sale proceeds to purchase a substitute property for the life tenant to live in. The additional proceeds from the sale will remain in the trust and the life tenant can be paid an income from this. This can be useful where the life tenant may not be able to look after a large home as they grow older.


Can the life tenant end the trust sooner?

If the life tenant (Mr) decides to revoke his life interest, he would simply inform the trustees that he wants the life interest to end and the share of the home will be distributed to the beneficiaries. However, if the life tenant also owns a share of the property, this does mean there is a risk that the children, now owning a share of the property, could attempt to force a sale of the property.

If the life tenant decides to revoke their life interest, as it will be earlier than death, the distribution to the beneficiaries will be classed as a Potentially Exempt Transfer (PET) from his estate and therefore he will need to survive the 7 year period for it to not form part of his estate for IHT purposes.

Disadvantages of a PPT

The main disadvantage of a PPT is that this inherently comes with a loss of control over the property for the survivor, since they’d be limited in how they manage the property e.g. would need the trustees agreement to sell, would be unable to take out equity release if needed.

Probate would be required and there would be fees associated with setting the trust up and transferring the property to the trust. Probate is unlikely to be avoided completely unless all the assets are held jointly.

There is also the future IHT liability that this creates since assets in the PPT would be treated as part of the life tenant’s estate for IHT purposes. If they had directly inherited the property, at least they could have had the opportunity to carry out some lifetime planning to reduce this.


How is a PPT taxed?

Inheritance Tax 

For inheritance tax (IHT) purposes, the life tenant of the trust is treated as inheriting the trust property on the death of the testator. If the life tenant is the deceased’s surviving spouse or civil partner the spousal exemption will apply and delay any IHT until the life tenant’s death.

When the life tenant dies, everything in the PPT will be revalued and included in their estate for IHT purposes.

Where PPT’s are used between married couples or civil partners, the RNRB will apply if the share of the home passes directly to their direct descendants i.e. children.

Where there are unmarried couples it would be easier to explain using the example below:

Fred and Elsie own a property as tenants in common. They are not married. Fred has 2 children from an earlier marriage. If Fred includes a PPT in his will giving Elsie a life interest in the property until her death and names his children as the beneficiaries at the end of the trust, the RNRB will not apply. The reason for this is because the interest is seen as passing to Elsie and would therefore need to pass to her direct descendants for the RNRB to apply. If, however, Fred and Elsie get married, the RNRB will apply as stepchildren are classed as direct descendants.

Capital Gains Tax

There is no capital gains tax (CGT) payable on the testator’s death. The trustees will acquire the testator’s share in the property at the value at the time of death. There will be no CGT payable on the life tenant’s death.

CGT would need to be considered in the event the property is sold between the testator’s death and the life tenant’s death.

If a PPT covers the main residence, this will allow the private residence relief for CGT to apply and ensure that no CGT will be payable if the property is sold, e.g. to downsize.

Income Tax

Where the property is the life tenant’s main residence, the trust will not be creating any income. However, if the property is rented, cash is released due to downsizing or if the property is not the life tenant’s main residence, the trust will produce an income which will need to be taxed.

The life tenant is entitled to all income of the trust and is generally taxed on the basis that it belongs to the life tenant. However, this will depend on whether the trustees receive the income and then pay it to the life tenant or whether the trustees mandate the income so that the life tenant receives it directly. If the trustees mandate the income, it will be the responsibility of the life tenant to declare and pay the income tax due.


Manisha Chauhan

Manisha joined the Society’s Technical Advice Team in July 2019 having previously worked as an Employment Solicitor in Warwickshire before relocating to Lincolnshire. Manisha provides advice on technical queries for Society Members and ongoing support on our professional drafting software, Sure Will Writer.


  • [email protected]

    21st October 2020 at 10:02 am

    Hi Manisha

    Interesting article and we do advise on these.

    however, one thing that has never been made clear to me is what happens when one of them dies.

    What is the legal mprocess that has to be followed?

    If the deceased only has their share of the property, what needs to be done to setup the trust and inform land registry.

    As an estate planner I think its important to make the client aware of the process when setting these schemes up.


    Brian Brotherton
    Estate Planner


    • Manisha Chauhan

      28th October 2020 at 9:14 am

      Hi Brian,

      On first death the 50% share of the deceased’s property will need to be passed to the trustees to hold on trust for the beneficiaries. The life tenant will have the right to reside in the property for life.

      After probate has been granted and the estate is ready to be administered, the deceased’s share of the property will need to be dealt with in the following order: –

      • Trustees will be required to hold a meeting to accept their office as trustees and confirm that they are happy to hold the property on trust.
      • Minutes will be drafted for the trustees to sign
      • A Declaration of Trust will need to be drafted between the surviving spouse and the trustees. The will becomes the basis of this declaration of trust, as it contains all of the required trust wording.
      • The property will then need to be transferred with the Land Registry into the names of the trustees using form TR1 – the Land Registry Title will then have a restriction placed against it which will refer to the Declaration of Trust

      I’m afraid for more detailed information you will need to speak to your probate provider as we don’t advise on probate matters.


  • Wayne Fleming

    17th June 2021 at 7:46 am

    Hi Manisha

    What is the “best” position in leaving a property where the owners are siblings owning the property as tenants in common.
    Each sibling has their own children that they wish to inherit their share of the property, whilst still “offering protection” for the surviving sibling on first death. to be able to continue living in the property.

    Wayne Fleming


    • Manisha Chauhan

      17th June 2021 at 1:45 pm

      Hi Wayne,

      As the surviving sibling owns a share of the home, they have the right to live in the property anyway.

      If they want them to continue to live in the property uninterrupted, a PPT would be advisable here as it would give the life tenant the only person with an interest in the property during their lifetime, avoiding the remaindermen (i.e. children) being able to force a sale.

      If there was no PPT trust and the children were gifted a share of the home which was owned alongside surviving sibling, they could force a sale of the property.


  • Rosh Parmar

    1st July 2021 at 9:10 pm

    Hi Manisha – great article. I have a specific query regarding a PPT and how it would operate in practice.
    The example we have is:
    Within the PPT, upon the death of the first life, the surviving spouse’s share of the property will be 50% and the children will get the remaining 50% in trust.
    What if the surviving spouse wanted to move house. For example, the children are still really young and the spouse wanted to move home to be closer to preferred schools. How would this happen in practice? Who’s name would have to go on the mortgage of the new house, if using the full proceeds from the sale of the original house (if that is even allowed)?

    For example, say the house is sold for £500k. Upon the sale of the house, will the spouse be able to use all of this £500k for the onward purchase? Or would £250k have to be set aside for the children in trust, and the spouse therefore only have access to £250k for the onward purchase?


    • Manisha Chauhan

      13th July 2021 at 10:24 am

      Hi Rosh,

      Thank you for your message.

      With regards to your query, the PPT would contain specific downsizing provisions which would allow the life tenant to move and the new home would be held on the same terms as the trust. The life tenant would inform the trustees who would need to agree to an alternative home being bought.

      If the surviving spouse wishes to move, the trustees can sell the property. The trustees can use their share of the proceeds towards a new property for the surviving spouse and will continue to hold a share in the property. Any of the trust’s share that is not used towards the purchase of the new property will continue to be held in trust. For example, if the trust and the survivor own a £200,000 property 50:50 and the survivor wishes to downsize to a property worth £100,000. Assuming they purchase the new property in equal shares too, the trust would own 50% of the new property (and £50,000 which they will invest to create an income) and the survivor will own 50% of the property (and £50,000 in cash).

      Where a property is held for example 50:50; the property will always remain as that, in shares, so the share which is held by the trust passes to the children along with any surplus cash which has been invested from the downsize. The life tenants own share of the property which they hold in their name along with any cash made from the downsize (their 50% of the excess sale proceeds), upon their death forms part of their estate and passes either by the terms of their own Will of via intestacy.


  • David Bayliss

    13th July 2021 at 4:18 pm

    What is the key difference between a Property Protective Trust (PPT) and Flexible Life Interest Trust (FLIT) ?
    Why would I recommend one over the other ?


    • Manisha Chauhan

      13th July 2021 at 5:15 pm

      Hi David,

      In short, a PPT is a life interest over the property only.

      A FLIT gives the life tenant, normally the surviving spouse or civil partner, a life interest over the residue and also allows them to benefit from capital at the trustees discretion. The FLIT also allows other beneficiaries to benefit from capital during the life tenant’s lifetime. On their death, the trust carries on as a discretionary trust so can continue to protect assets after second death. Both trusts provide protection from care fees and also sideways disinheritance

      We have set out links to our articles below which discusses the trusts in more detail.


  • Yvonne Joy Gutteridge

    20th August 2021 at 6:35 pm

    Hope you can help with my query.
    I am a trustee of a PPT together with my mother who is also a trustee and surviving spouse.
    I have Power of Attorney over her finances which I now have too use due to her ill health. She has recently gone into full time care home in which she pays the full costs.
    Firstly, do I have to add another trustee? (I can add my brother if it is necessary). I am reluctant to do this as he has not taken any interest in Mums welfare for quite some time and most certainly since her illness has taken hold.
    Secondly, at some point I may have to sell Mums home to help to pay future care home fee’s. Will I be able to do this as a sole trustee.


    • Manisha Chauhan

      5th September 2021 at 9:51 pm

      Hi Yvonne,

      As your mum still has capacity, she can still remain a trustee. If she is wanting to step down then although the trust can still continue, as there are 2 trustees required for land and property, a second trustee would need to be appointed unless the Will has a substitute trustee appointment which will take effect depending on the wording of the clause. A solicitor will need to draw up a deed of appointment for a second trustee to be appointed.

      A second trustee would be required to sell the home. However, appointing a second trustee to act just for the sale of the property is a fairly straightforward process and something a conveyancer will be able to advise you on.


  • Rohit Shah

    19th October 2021 at 7:25 pm

    Hi Manisha

    Very useful article

    In a PPT, After the life tenant dies instead of gifting property absolutely to the two children can you gift the property to the residue which is held in Discretionary Trust (DT) . My understanding is that the property will not qualify for RNRB if it is held in DT. Can the Trustees appoint the property to the children from the discretionary trust within two years of death so that the property can qualify for RNRB.

    Many Thanks


    • Manisha Chauhan

      20th October 2021 at 10:17 pm

      Hi Rohit,

      Thank you very much.

      At the end of the PPT the property can fall to residue and therefore part of the discretionary trust. However you are correct in saying this will lose the RNRB. If the clients want to ensure the RNRB will apply, we would advise at the end of the PPT, the home is left to direct descendants and the remainder of the assets form part of the discretionary trust.


  • Fiona Ridge

    21st October 2021 at 10:38 am

    Hello, I’m wondering if you can help.
    My husband and I are in the process of drawing up wills. We currently own house as joint tenants, but will be changing to tenants in common so we can each leave our share of house. My husband has a daughter from previous marriage. He wants her to have some percentage of the property after he dies but wants to protect me, whilst I’m alive. He also wants for me to be able to move and downsize if necessary and release capital for me to use as necessary. I don’t want to leave my half share of property to his daughter – I want it to be split between various charities and godchildren – but for him to be able to live in if i die before him. I think our draft wills have been drafted to put property to PPT – and that the property forms part of residuary estate if my husband dies first. There is proviso that I can move and downsize, but nothing mentioned that i can benefit from the capital or anything, it says proceeds of sale go to his daughter. From reading your arcticle, am I right in thinking a flexible life interest would be better? thank you Foina


    • Manisha Chauhan

      25th October 2021 at 10:55 am

      Hi Fiona,

      The PPT can achieve what you are wanting and at the end of the trust period you can each specify where you would like your share of the property to go to. With regards to the proceeds of sale, his Will would be drafted in accordance with his wishes and therefore this may be what he has instructed. Given that you are in the process of drawing up your Wills, we would advise you discuss this further with your solicitor or will writer.


  • Fiona Ridge

    21st October 2021 at 10:48 am

    Could we ensure that my husbands half of property passes to his daughter so is covered for IHT purposes if we did FLIT. My half doesn’t go to descendants as I don’t have any children or siblings or 1st cousins. What is our best option for ensuring I can benefit from downsizing and capital if necessary, but protect property and estate from IHT.? thank you Foina


    • Manisha Chauhan

      25th October 2021 at 10:58 am

      Hi Fiona, the Will can be drafted so your husbands share of the property passes to his daughter. However we would advise you discuss this further with your solicitor or will writer who will be able to specifically advise both of you. If you have not had your Wills drafted as of yet, please do go to our “find a member” area and search for a will writer in your local area who will be able to provide you with tailored advice.


  • Lorenc

    21st October 2021 at 12:37 pm

    Hi Manisha,

    Can a sole property owner include a PPT in their will,their spouse to be the life tenant ,and the children the remainder?


    • Manisha Chauhan

      25th October 2021 at 9:39 am

      Hi Lorenc, yes this is fine. It just means the entire property will enter into the trust.


  • Rosanna

    6th December 2021 at 4:59 pm

    Can you please answer this question about Protective Property Trust Wills:

    Can the Trustees also be a named beneficiary in a Protective Property Trust Will?


    • Siobhan Rattigan-Smith

      15th February 2022 at 2:13 pm

      Hi Rosanna, it is possible for a trustee to also be a beneficiary of a trust although care should be taken to avoid any conflict of interest. It is best to also appoint an uninterested party as a trustee.


  • Kevin Hutchinson

    15th February 2022 at 11:14 am

    Hi Manisha,
    If a client owns 50% and the Trust the other 50% and lets say they downsize form £300,000 to £200,000. The remaining £100,000 split between client and Trust. Can the Trustees transfer the full £50,000 to the client or does it have to be invested to provide an income?



    • Siobhan Rattigan-Smith

      15th February 2022 at 2:12 pm

      Hi Kevin, what the trustees could do with their share of the surplus proceeds depends on the wording of the trust. In most cases they would be expected to invest them to provide an income for the life tenant, but it is also possible that they have been given a discretionary power over capital and could pay or loan the capital to the life tenant.


  • Simon Baker

    31st December 2022 at 11:00 pm

    Hello Manisha,
    My wife and I have a PPT within our wills on our home to the benefit of our two children. We are both in our mid-fifties. Should we wish to move, for example downsize before one of us dies and thus before activating the trust can we do so without problem?
    Also should we both for some reason decide that we no longer want a PPT on the home can we revoke it by renewing our wills before one of us dies?
    In advance, many thanks for your reply


    • Manisha Chauhan

      10th January 2023 at 11:58 am

      Hi Simon, the PPT would only take effect on first death if this is how the clause has been drafted. Therefore if you wanted to move home or downsize before one of you passes, this is fine. The PPT clause in your current Will may set out your current address or “any other main residence” which essentially means the main residence at your date of death. However if this wording isn’t present then you will need to update your Wills so please do get in touch with your will writer.

      If you decide you no longer want a PPT then you can renew your Wills to remove this clause before first death.


      • SimonBaker

        26th January 2023 at 6:58 am

        Hi Manisha,
        Thank you for your reply and clarification which is very much appreciated.
        Kind regards,


  • Paul

    26th February 2023 at 12:17 pm

    Hi Manisha,

    We have a scenario at the moment where my Mom’s partner died. They had 50% tenants in common on the deeds is my understanding.
    The deceased partners daughter is the beneficiary of the 50% and I believe a PPT is being setup so my mum can continue to live in the property.
    The daughter was very keen to get a valuation on the property which has mad me suspicious.
    I assume the trust will own 50% of the house and as thus (lets say the house was £300,000), they effectively have a trust worth £150,000.
    If the market value of the house drops, lets say to £250,000 – am I right in thinking as they own 50, if the house was sold they are only entitled to £125,000?
    Is there anything they can do, like some clause, to preserve the value at £150,000?
    I don’t want Mum to lose out in the circumstances whereby the house value drops, she want to buy out of the trust and use the money to buy a small property.


    • Manisha Chauhan

      27th February 2023 at 4:43 pm

      Hi Paul, on first death, the deceased’s share of the home goes into the trust. Until the trust ends, the deceased partner’s daughter would have no interest in the property so she couldn’t try and force a sale if this is the concern.

      They couldn’t preserve the house value I am afraid.


  • Jodie

    18th March 2023 at 10:03 pm

    Hi, Thank you for a great article. My father has passed away leaving my Son & I as trustees for his 1/2 of the property. Am I right in thinking we must get probate and amend the owner’s details on Land Registry? Is probate necessary? We are a close family so no disputes etc & Mum remains in the house. Thank you.


    • Manisha Chauhan

      20th March 2023 at 9:31 am

      Hi Jodie, sorry to hear about your father. As there is a trust you will need to go through probate. Unfortunately we aren’t able to advise on probate matters. If you do require advice or assistance, please contact SWW Trust Corporation.


  • Paul

    26th May 2023 at 10:45 am

    Hi Manisha
    Can you let me know your views on a paramount cluase within a PPT. Does this give the life tenant the right to sell / downsize and able to override the trustees?


    • Manisha Chauhan

      2nd June 2023 at 12:57 pm

      Hi Paul, the inclusion of this clause does not give the life tenant any additional rights and does not let them override the trustees in any way. This clause reiterates that the trustees are only required to consider the needs of the life tenant and not those that are to benefit at the end of the trust period i.e. the remainder beneficiaries. As an example, if the life tenant wanted to sell the home but the remainder beneficiaries did not agree to this as they wanted to inherit that particular property, the trustees could not refuse to sell the home on this basis.


  • Abigail

    26th July 2023 at 4:40 pm

    Hello Manisha

    When a Life Tenant passes and the PPT is therefore ended, would the Property fall into the residuary estate for probate purposes. If there is a clause within the Trust part of the Will which allows capital and income to be paid to the named beneficiaries does this mean that the property element of the estate would fall to the Trustees to manage or would it still fall part of the main estate and be distributed accordingly to the beneficiaries?


    • Manisha Chauhan

      11th September 2023 at 10:32 am

      Hi Abigail, when the life tenant dies and the trust ends, the share of the property that was held in the trust will pass to the remaindermen. However we are unable to comment specifically as it depends how the Will has been drafted with regards these provisions.


  • Julie Cockburn

    26th July 2023 at 8:06 pm

    Hi Manisha
    Fantastic article!
    I have one question. Where there is a PPT and a substitute property is to be purchased, the Will is silent as to the payment of the associated sale and purchase costs – are they apportioned equally between the Trust and the surviving spouse?


    • Manisha Chauhan

      11th September 2023 at 10:28 am

      Hi Julie thank you very much. When the substitute property is purchased, this can either be purchased between the trust and the life tenant, entirely by the trust or entirely by the life tenant.


  • Ian Nicholson

    16th August 2023 at 7:34 pm

    Hi Manisha, thanks for a fabulous article. I think you’ve answered this but can i confirm: If a PPT is in place and years after the wife or partner dies the survivor (with the agreement of the trustees) downsizes, if the Will has been worded to leave the equity released from the downsizing to the Life Tenant to provide income, my questions are:

    1) Is there a limit on the income they can take
    2) If the equity is say £200,000, does the Life Tenant have to take income from the full £200,000, or is it from £100,000 and they can use the rest as they want?




    • Manisha Chauhan

      25th September 2023 at 12:52 pm

      Hi Ian, there would not be a limit on the income they can take as the life tenant is entitled to all income in the trust. If the equity is £200,000, assuming the property was held 50/50, £100,000 would belong to the trust (which the life tenant could receive income from) and the other half of the surplus from downsizing would go to the life tenant.


  • Ann Smith

    25th October 2023 at 11:43 am

    Hi Manisha,
    I have question about the number of trustees needed. If someone wanted to set up a Right to Reside Trust and wanted 1 executor (not the life tenant) with 2 reserve executors would this be sufficient or would they need to appoint trustees for the trust?


    • Manisha Chauhan

      12th December 2023 at 11:49 am

      Hi Ann, there would need to be two appointed acting together, a single original trustee and a single/2 replacements wouldn’t meet the requirement for there to be two trustees. The sole trustees would need to exercise their powers under s36 Trustee Act 1925 to appoint someone else to act with them, so could opt to appoint the person named as the replacement. It is best practice to name two trustees in a right to reside trust, but not an absolute requirement unless the property needs to be sold. It is only at the point of sale that a trust of land needs two trustees to pay proceeds to and overreach the remainder beneficiaries interests, up until that point the trust could have a sole trustee technically.


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