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What is a Declaration of Trust

What is a Declaration of Trust?

What is a Declaration of Trust?

A Declaration of Trust is a legally binding document which sets out who owns the property and exactly how the property proceeds should be divided if it is sold.


Hannah Gordon explains what a Declaration of Trust is and how it may benefit you.

With the current stamp duty holiday in place, we are seeing an increase in the number of people buying new homes.

  • If you are looking to buy a home with a person who is not your spouse, have you considered entering into a Declaration of Trust?

Declaration of Trust

A Declaration of Trust is a legally binding document which sets out who owns the property and exactly how the property proceeds should be divided if it is sold. Most commonly it is used to protect a person’s initial contribution where the contributions are unequal. A Declaration of Trust is something that you should consider when you are buying a property with a partner, friend or another family member.

For example, Sam and Sally are in a relationship but are not married. When they purchased their home, Sam contributed £5,000 and Sally contributed £10,000 towards the deposit. They entered into a Declaration of Trust which states that if the property is sold, the proceeds will be divided so that Sam will receive £5,000, Sally will receive £10,000 and the balance will be shared.

What if we do not have a Declaration of Trust?

If you do not enter into a Declaration of Trust and are not married you may only get an equal share of any sale proceeds.

Continuing with Sam and Sally, if there is no Declaration of Trust, the starting point would be that the sale proceeds will be divided equally, despite Sally having contributed more towards the deposit. To most people, this will be unfair. Sally would have to bring a litigation claim under trusts law to demonstrate why she should receive more. In the absence of any legal document such as a Declaration of Trust, the court may simply conclude the net equity should be divided equally. Having a Declaration of Trust is therefore helpful in determining the intentions of the parties and may avoid lengthy and costly litigation.

Buying a Property Together

How Kerseys Can Help

If you would like to discuss arranging a Declaration of Trust, please do not hesitate to contact us at [email protected] or telephone us on Ipswich 01473 213311 or Colchester 01206 584584, alternatively, you can visit our web site and live chat with us or request a call back by clicking the “Call Me Back” and a member of the Family team will be happy to speak with you.