ACCA Advanced Taxation (ATX) Practice Exam

Who are the legal owners of property in a trust?

1. Beneficiaries

2. Trustees

3. Settlor

4. Legal representatives

The correct answer is: Trustees

In a trust, the legal owners of the property are the trustees. Trustees hold legal title to the trust assets and are responsible for managing those assets according to the terms set out in the trust deed and in the best interest of the beneficiaries. This role involves a fiduciary duty, requiring the trustees to act impartially and prudently. Beneficiaries, while they have equitable rights to the benefits and income generated from the trust property, do not possess legal title to the assets themselves. The settlor is the individual who establishes the trust and contributes the assets but typically does not retain ownership rights once the trust is created. Legal representatives may have roles in managing estates but do not specifically pertain to the legal ownership structure of a trust. Thus, the trustees are the correct answer as they legally own and administer the trust assets.