A question which arises from time to time with some of our clients when purchasing rural property in Scotland is whether they can buy in the name of their children and whether such a conveyance will be considered valid from a registered ownership perspective. The simple answer to these questions is yes, you can nominate your child to benefit from a conveyance and provided you adhere to the requirements, yes, it will be valid. It is important to note however, that there are different rules in place to safeguard the interests of children depending on their age and this can be split into two groups:
- Children who are under the age of 16 years old
- Children who are aged 16 or 17 years old
Children who are under the age of 16 years old
In this scenario, a child can transact on all types of property matters (e.g. a purchase, sale, transfer etc) on the proviso that this is done so by an appointed legal representative (e.g. mum or dad) or guardian (made by either a court order or testamentary deeds) acting on their behalf.
This means that a child of this age can legally acquire rural properties such as estates, farms and country houses in their own names and obtain a validly registered title from Registers of Scotland. For registration purposes, the only requirement expected of the Keeper is that the application shall disclose that there is a child involved – the Keeper shall work on the assumption that the legal representative or guardian acting on behalf of the child in respect of the registration process shall have the authority to do so.
However, it is important to note that in the absence of a legal representative, the following will apply:
- any deed granted by a child under 16 will be deemed void and therefore, cannot be submitted for registration with Registers of Scotland
- any deed granted in favour of a child under 16 may be void and the Keeper at Registers of Scotland shall ensure that the warranty is limited.
Children who are aged 16 or 17 years old
When a child turns 16 in Scotland, they are deemed to have the legal capacity to negotiate, enter, grant and deal with all types of property transactions on their own behalf without the need for a legal representative to be appointed. This means that any deed entered into or granted by them shall be valid and capable of being registered with Registers of Scotland without any limitation of warranty being required to be noted by the Keeper.
That said, it is important to note that up to the age of 21, a young person can subsequently apply to the courts to have a transaction previously dealt with by them (between the ages of 16 and 17 inclusive) set aside. The court shall not only review any evidence submitted by the young person to support their request, but they shall also consider their application based on what an adult exercising 'reasonable prudence' would have done in a similar situation. Where the court is satisfied with the application made, they shall have the power to subsequently declare the transaction to be void.
Future Planning
Legal capacity aside, if you are planning to involve your children in any future property transactions, it would be prudent to take advice from our Personal and Family and/or Tax colleagues in the first instance as they will be able to guide you further on the benefits and implications which may arise from taking such steps.
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