Considering a Declaration of Trust

It is not uncommon  that when a couple purchase a home together  they make unequal contributions towards the purchase price; maybe a parent has gifted one of them a significant sum of money or one of them has contributed  the sale proceeds from a previously owned property.  

When this happens the couple may wish to own their new home in different shares to reflect their  different contributions.  There may be other  reasons apart from differing contributions why the shares should not be equal. For example, there may be tax planning considerations or  asset limitation as in the case of a business owner wishing to protect the property from future creditors. 

Different shares in property are created  by using a method of ownership known as Tenants in Common; creating separate and distinct legal shares that can then be owned individually.  However  the law presumes that  joint owners of property  own it in equal shares, which means that the onus is on the owners to show that their shares in the property are different.

The easiest way to do this is for the owners to enter into a Declaration of Trust which is a document setting out the shares in which the property is owned, the proportions in which the owners are to contribute to any mortgage repayments and other property outgoings and how and when the property is eventually to be sold.  Each Declaration of Trust can be tailored to meet a specific need or circumstance and can deal with issues such as whether on the death of one owner the survivor has any right to stay in the property and if so on what terms.

A Declaration of Trust is about creating certainty. It is not a public document and is not registerable at the Land Registry but it informs the owners, the owners’ personal representatives and the owners’  lawyers, exactly how the property is owned and the agreed process for resolving  any disputes in the future, potentially preventing any messy and expensive  litigation.

If you would like to find out more about Declarations of Trust or to speak to us about creating one please contact us via the website at or telephone  01635 580858 and ask to speak to a member of our private client team.