Declarations of Trust.

A Declaration of Trust (sometimes called a deed of trust) is a legally binding document that sets out how ownership of a property is shared between the parties involved. It defines each person’s financial interest in the property, ensuring clarity now and in the future.

A declaration is commonly used where:

• Buyers make unequal contributions to the deposit or mortgage repayments

• One party contributes towards renovations or improvements, increasing their share in the property

• The property is owned as tenants in common rather than joint tenants

• You want to protect your investment if the property is sold later

• To provide potential tax advantages, including future capital gains tax planning

This means all parties know exactly what their entitlement is, reducing the risk of disputes.

Yes, but challenges are rare and only possible in limited circumstances. A declaration of trust could be challenged in situations involving:

• Undue influence – one party was pressured into signing

• Mistake – incorrect terms were included by accident

• Misrepresentation – one party was misled

• Capacity issues – a party lacked the ability to understand the agreement

Challenging a declaration requires valid legal grounds and may involve mediation, negotiation, or, in some cases, court proceedings. For this reason, it is vital to have your declaration drafted by an experienced declaration of trust solicitor to ensure the document is enforceable.

If you are buying a house with someone else, especially where contributions are unequal, a declaration of trust when buying a house is strongly recommended. It protects your share of the property and provides clarity on what happens if the relationship breaks down, if one party wants to sell, or if one party dies. Without it, disputes can arise, and you could lose out on your fair interest in the property.

A Declaration of Trust itself does not need to be registered, but if the property is owned as tenants in common, you should register a restriction with HM Land Registry. This ensures the property cannot be sold or transferred without all owners’ consent, giving added protection. Our team can handle both the drafting of the deed and any necessary Land Registry filings.

A declaration of trust itself does not usually trigger stamp duty land tax, but changes in ownership percentages or transferring equity can. It may also have implications for capital gains tax, particularly where one party transfers or later disposes of their share in the property. Our solicitors advise on the tax implications before finalising any agreement to ensure there are no unexpected liabilities.

The declaration of trust cost varies depending on the complexity of the agreement. Simple declarations setting out ownership percentages are generally less expensive, while agreements covering rental income, unequal shares, mortgage repayments, or stamp duty land tax considerations require more detailed drafting. We provide fixed-fee transparency wherever possible, so you know the cost upfront.

A declaration of trust after marriage or in the event of separation/divorce may still be valid, but the court has the power to override it when making financial orders. While the declaration will be considered as evidence of ownership intentions, it may not be conclusive. For this reason, it’s essential to take both family law and property law advice if your relationship breaks down.

Yes, a declaration can be amended or revoked if all parties agree. For example, if ownership contributions change or if one party makes significant further investments, you may want to update the deed of trust. We can draft a deed of variation to reflect the new arrangements.

Yes. A declaration of trust for rental income can specify how income and expenses from letting out the property are to be divided between co-owners. This is particularly important for unmarried couples or investors purchasing property together, as it ensures the split reflects each person’s contributions and is compliant with HMRC requirements.