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A company “transfers” properties to a director who owns them
I am instructed by a former director and shareholder (D) of a company whose principal activity is property letting. It appears that due to financing difficulties four of the investment properties were in fact purchased in D’s name some time ago and the mortgages were also in his name.
The accounts produced by another firm have always included the properties as company assets and the mortgages as creditors. It is presumed that the rents received and the interest charged on the mortgages were also included in the company’s accounts.
No declaration of trust was ever prepared and there is no mention of any deed of trust (or otherwise) in the past accounts. The company always paid the monthly mortgage payments.
My client and his fellow directors have parted acrimoniously and the settlement terms were a reduced cash sum paid to D and agreement that D retain the four...
