What is the difference between legal and beneficial ownership?
In general law, a distinction is made between ‘legal ownership’ on the one hand and beneficial’ or ‘equitable’ ownership on the other. If you are the absolute owner of an asset you have both a legal and a beneficial interest in it. You are not only the registered owner of the asset (e.g. in the case of land, your name is on the title deeds), but you can also benefit from any gain it produces. The absolute interest (the combined legal and beneficial interest) can be split. So while you retain the legal interest, you can let someone else have any benefit gained from the property. Alternatively, you can pass the legal interest to one person and the beneficial interest to another. If you wish to make this division, whether during your lifetime or under your will when you die, you create a trust. You create an interest in the property for the benefit of a person, or people, without giving them the legal interest.
