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trust for sale

A trust under which the trustees have an obligation to sell the trust property and hold the proceeds of sale in trust for the beneficiaries. A trust for sale may be imposed by statute; for example, under the Law of Property Act 1925, when land is owned by two or more persons jointly or as tenants in common, and under the Administration of Estates Act 1925, which provides that an intestate’s estate is held on trust for sale by his administrators. It may also be created by will or deed and is used as a method of settling land on beneficiaries in succession to one another. Although the trust imposes an obligation on the trustees to sell the land, the Law of Property Act 1925 gives them power to postpone the sale for as long as they think fit; while the land remains unsold, the trustees have all the powers that the immediate beneficiary and the trustees of the settlement would have in the case of *settled land. Under a trust for sale the beneficiaries are treated for most purposes as having interests in the proceeds of sale, not in the land itself. This treatment has sometimes been varied when a statutory trust for sale arises in the context of co-ownership of land. For example, the courts have recognized that beneficial co-owners may have rights over land for the purpose of determining the rights of a person in actual occupation in the context of the Land Registration Act 1925 (see *overriding interests).

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