When do you need a Declaration of Trust?

Buying a house

There are numerous circumstances whereby parties do not have an equal interest in the equity, even though they may both legally own the property.  Often, first time buyers have raised their deposits with the help of a gift from parents or even grandparents.  A Declaration of Trust ensures that each individual owner protects the initial contribution which they made towards the purchase price. It allows them to protect the money that their family gave them in the event of the breakdown in the relationship.

Investing in a second house

Similarly, couples may invest in a second or subsequent property, from which they receive a rental income.  A Declaration of Trust can be used to set out the beneficial ownership and also how the rental income is received, as often only one party receives the income (or the majority of it). This allows the correct income tax to be attributed to the rental income. 

If you are purchasing a property with another person and making unequal contributions towards the purchase, are receiving unequal shares of any rental income received or are considering cohabiting with a partner and wish to ensure that your beneficial interest in your home is protected, we would strongly advise that you enter into a Declaration of Trust.  

If your circumstances aren’t specifically referred to here but you feel you may benefit from a Declaration of Trust, we would be happy to talk this through with you.

Avoid disputes if your relationship breaks down

Although the Declaration of Trust can be an additional step in a perhaps already stressful situation, the benefit far outweighs this if there is a dispute with regard to the equity split at a later stage. Such disputes can be extremely lengthy and expensive to resolve and could be avoided by entering into a simple document at the outset.

It is worth noting that if you have already purchased your property with another person, contributed to the purchase of a property with another person or have already agreed that your partner can share your home, it is not too late to enter into a Declaration of Trust. It is better to do so retrospectively than to not have one at all.

How we can help

Neves charge a fixed fee for Declarations of Trust, allowing you to plan for costs during the conveyancing process. We are also happy to have an initial conversation with you about your requirements, in order to ensure that a Declaration of Trust would be right in your circumstances.

Get in touch by calling 0330 0945 500, emailing info@nevesllp.co.uk or completing our Contact Form and we'll get back to you.