Mortgage Charges CH1 · Checkmate The Matrix

Mortgage Charges CH1

Something else I've just thought about on the land registry front that some people might want to look into. Most of us are familiar with or have actioned the RX1. But what about the CH1?

Q: I have property registered with the LR. The bank has first charge. I have equity. I have already placed a restriction stating any new charge requires the approval of myself and another party in order to be granted. For additional asset protection, explore the option of placing a charge against the property via CH1, naming a private trust as the owner of the charge, for the full equity/value of the property (after the bank's). If a creditor company or third party then sought to place a charge after the above had been actioned, confirm that (after the bank mortgage is full paid) that not only would the restriction prevent the charge from being filed, but that even if it were filed, in the event of property sale - the trust would receive all remaining value therefore leaving nothing left for the last charge by the creditor company/third party firm.

1. What you have already

Bank first legal charge (mortgage) – gives them priority on repayment from sale proceeds.
Restriction (you said it requires your approval + another party before a new charge can be registered) – this prevents further charges being registered without your consent.

✅ That restriction already gives you veto power over most third-party attempts to register a charge against the property (unless a court orders it).

2. Additional layer: a charge in favour of your own trust (via Form CH1)

You could execute a legal charge in favour of a private trust that you control (e.g. a family trust).
The CH1 is the form used to register a charge. The Land Registry would enter this after the bank’s first charge.
You can set the amount secured as up to the full equity (i.e. all sums due under the trust agreement, up to an amount you specify – it doesn’t have to be a fixed loan balance).

Effect:

On the register, after the bank, the trust appears as next chargee.
In a forced sale, once the bank’s mortgage is paid, the sale proceeds would go to the trust (up to the secured amount).
If the charge covers “all sums owing” or the equity value, this would soak up everything.

3. What happens if a third party creditor tries to get in afterwards?

Restriction already blocks registration: They cannot enter a consensual charge because you and the named party must approve it.
Court-ordered charging order: Different. A creditor could still apply to court for a charging order (against you personally), and the Land Registry must register it if the court orders it, even if your restriction is in place. Restrictions cannot bar a court order.
Priority: Even if they succeed, their charge would sit behind the trust’s charge.

4. Things to watch out for ⚠️
Substance over form: If the trust charge is seen as artificial (no genuine loan/debt behind it), a creditor could challenge it as a sham transaction or as a transaction defrauding creditors under the Insolvency Act 1986 (s.423).
Insolvency risk: If you later become bankrupt, a trustee in bankruptcy could try to set aside the charge if it was entered with intent to put assets beyond creditors’ reach.
Trust validity: The trust must be properly constituted and actually hold rights against you (e.g. documented loan, promissory note, or beneficial interest). Otherwise, Land Registry may question it or creditors could attack it.
Disclosure: A charge in favour of a related trust is transparent on the Land Registry. Creditors will see it. It protects priority, but it also signals your strategy.

5. Answer to your scenario

Yes – once the trust’s CH1 charge is registered, any later consensual charge would be blocked by your restriction.
Yes – even if a court-ordered charge were registered, in the event of sale, your trust would be paid before that later creditor. If the trust’s charge covers all available equity, nothing remains for them.
BUT – effectiveness depends on the trust’s charge being a valid, enforceable security for a genuine debt/obligation. If it’s just “protective” with no underlying reality, it risks being struck down in litigation or insolvency.

👉 In practice:

Many asset protection strategies use exactly this – layered charges in favour of related trusts/companies – but the strength lies in papering it properly (loan agreements, board resolutions, trustee minutes, etc.).
If it’s genuine and documented, the Land Registry doesn’t police “why” a charge exists, only that it is in proper form. But creditors and courts can later scrutinise it.

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