What does a declaration of trust actually record?
At its simplest, the shares. Seventy per cent and thirty per cent, say, or a fixed sum back to one owner and the balance split equally. A fuller deed goes further. It says whether the shares are fixed or move with contributions, how mortgage payments and improvement spending are accounted for, who pays the outgoings, and what happens on sale: whether one owner can require a sale, how a buy-out is valued, and who gets first refusal.
The same document is called a deed of trust or a trust deed. The name does not matter. What matters is that it is executed as a deed, signed by every beneficial owner and witnessed, so that it is enforceable between you without further evidence.
It is not a cohabitation agreement. It does not deal with children, maintenance or possessions, and it is no substitute for a will. The deed fixes your share; the will says where that share goes. The two must say the same thing, and a will can be drafted alongside the deed.
| Situation | Without a declaration of trust | With a declaration of trust |
|---|---|---|
| Unequal deposits, joint names | Presumed equal shares; the larger contributor must prove otherwise | Deposit returned to its contributor, or shares fixed to match |
| Parent contributes to a child's purchase | Treated as a gift unless the parent can prove a loan or a share | Loan, gift or share recorded and enforceable |
| Contributor not on the legal title | No record of any interest; a sale can go ahead without them | Interest recorded and protected by a restriction on the register |
| One owner pays more of the mortgage | No adjustment unless a common intention is proved | Deed states how extra payments are credited |
| One owner wants to sell, the other does not | Application to court under section 14 of the 1996 Act | Sale mechanism and buy-out valuation already agreed |
| One owner dies | Shares argued out with the estate | Share fixed and passes under the will |
Do we need to be tenants in common for a declaration of trust to work?
Yes, where the shares are unequal. Joint tenants hold no shares at all: each owns the whole with the other, and on death the survivor takes everything. A deed recording sixty and forty cannot sit on top of that. So unequal shares only work for tenants in common, and the joint tenants or tenants in common choice is made in panel 10 of the TR1 at purchase, on the edition dated 29 August 2023, and the numbering should be checked against the form in force on the day (checked 20 September 2026).
If you already own as joint tenants, the joint tenancy must be severed first, by notice under section 36(2) of the Law of Property Act 1925, with the Form A restriction applied for on form SEV. Our severance service does that and is quoted alongside the deed.
The deed itself is never registered and does not appear on the title register. The Form A restriction is what appears. Its prescribed wording, Form A in Schedule 4 to the Land Registration Rules 2003, says that no disposition by a sole proprietor of the registered estate, except a trust corporation, under which capital money arises is to be registered unless authorised by an order of the court. So it is a bar on registration rather than a direction about payment, and it works because of the rule it protects: section 27(2) of the Law of Property Act 1925 requires capital money to be paid to at least two trustees or to a trust corporation, and section 2(1)(ii) makes a sale overreach the beneficial interests only where section 27 has been complied with. The practical effect is that a sole surviving owner cannot sell and keep the whole price: a second trustee joins in (all checked 20 September 2026). Where a contributor is not on the title, Form A does not name them, so they should also apply on RX1 for a standard form restriction of their own. The one that requires a named person to consent before a disposition is registered is Form N in Schedule 4 to the Land Registration Rules 2003. Note that Form II is a different thing and is often confused with it: Form II requires a certificate that written notice of the disposition was given to the named person, which tells them a sale is happening but does not let them stop it (Practice Guide 19 sections 7.14 and 7.34, updated 27 July 2026, checked 20 September 2026).
When is a declaration of trust overridden?
Divorce is the main case. On divorce or dissolution the family court can redistribute property regardless of the deed, though the deed remains evidence of what each of you intended. The court is exercising a statutory discretion under sections 23 to 25 of the Matrimonial Causes Act 1973, and section 25 makes it weigh all the circumstances with the welfare of any minor child first, so a declaration of trust is one factor rather than the answer. For unmarried owners there is no such court, and the position is close to the opposite: an express declaration of the beneficial shares is conclusive between them short of fraud, mistake or a later variation, which is the rule in Goodman v Gallant and the reason Stack v Dowden and Jones v Kernott address only cases where no express declaration was made. So the deed is the whole of their protection, and it is also the whole of their exposure if it says the wrong thing.
Care fees are the other. A local authority assesses the value of your beneficial share, not the whole property, so a deed fixing that share is relevant. The Care and Support Statutory Guidance, Annex B paragraphs 12, 13 and 18, starts from an equal division between joint owners but values the actual beneficial share where the evidence shows a different one, and paragraph 13 says a property must not be taken into account where the person is the legal owner but not the beneficial owner. In Wales the equivalent is the Part 4 and 5 Code of Practice on charging and financial assessment, at paragraph 2.9. A deed made to move value away from someone who may need care can be treated as deliberate deprivation of assets and disregarded: Annex E, paragraphs 6, 8, 11 and 18 to 19, which lists a trust deed among the documents an authority may ask to see, and asks whether avoiding the charge was a significant motivation and whether the person could reasonably have expected to need care at the time. There is no fixed look back period, so an old deed is not safe by age alone, and where deprivation is found the authority treats the person as still holding the asset as notional capital under Annex B paragraphs 29 to 32 (checked 20 September 2026).
Tax follows the deed too. Where a parent takes a beneficial share rather than making a loan, and already owns a home, the higher rates of Stamp Duty Land Tax in England, or Land Transaction Tax in Wales, can apply to the purchase even though the parent is not on the register. The reason is that paragraph 11 of Schedule 4ZA to the Finance Act 2003 treats a beneficiary under a bare trust or a qualifying settlement as holding the dwelling, and paragraph 3 of Schedule 16 treats a bare trust beneficiary as the purchaser, so the register is not what decides it. Wales reaches the same place through Schedule 5 to the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017. A documented loan is treated differently, because a lender takes security rather than an estate in the land and a charge is not a major interest within section 117 of the Finance Act 2003, so the lender is neither purchaser nor beneficiary. That only holds if it is a loan in substance as well as in name, properly documented and actually repayable; a contribution labelled a loan but never intended to be repaid is a beneficial interest whatever the paperwork calls it. The tax position should be confirmed before the money moves (checked 20 September 2026). The shares in the deed also fix each owner's share of any capital gain and of rental income. Two points are worth knowing before a deed is signed. Where a share is given to an unmarried child under eighteen and it produces income, section 629 of the Income Tax (Trading and Other Income) Act 2005 taxes that income on the parent who provided it rather than on the child, once it exceeds 100 pounds in the tax year. And on a later sale, private residence relief covers the last nine months of ownership under section 223 of the Taxation of Chargeable Gains Act 1992 as amended by section 24 of the Finance Act 2020, extended to thirty six months by section 225E(4) where the owner is a disabled person or has moved into a care home. Where a couple separate and the departing partner keeps a share pending a later sale, section 225B preserves the relief on that share, and since 6 April 2023 it reaches a deferred sale to a third party as well as a transfer between the couple (checked 20 September 2026). On a death, the deed also tells the personal representatives what the deceased's share actually was.