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What is a Declaration of Trust?

Published on 20 November 2017 | Modified on 6 December 2022

Written by Stacey Bennett
Conveyancing Solicitors

When two or more people purchase a property they must decide how they wish to share the property between them.  They can own it either as “joint tenants” or “tenants in common”.  If they own as joint tenants, then they both own the whole of the property.  When one of them passes away, the other person continues to own the whole property.  If they decide to be tenants in common, then each person owns a specified share of the property.   When either of them dies, their share is distributed in accordance with their will and doesn’t automatically belong to the other co-owner.  Tenants in common can split the value of the property between them in whatever proportions they would like.  A Declaration of Trust is the document which states the exact shares of each co-owner.   It spells out how any future proceeds of sale will be split between the owners.

Should I have a Declaration of Trust?

You might consider a declaration of trust anytime you are purchasing a property with another person and you are each paying a different amounts towards the purchase.  Even if you are concerned that it may be an awkward conversation to have with your co-owner before you buy, it will save a lot of worry, confusion and potential legal costs if you disagree about how proceeds of sale are to be split when you come to sell the property in the future.

What information can I include in a Declaration of Trust?

A simple Declaration of Trust will state how much each co-owner will receive upon the sale of the property.  For example, lets imagine a property cost £100,000.00 to purchase and one co-owner paid the whole of a £10,000.00 deposit.  The Declaration of Trust can state that upon the sale of the property the first £10,000.00 from any “sale proceeds” is paid to that co-owner.  (The proceeds is the money left after the mortgage has been repaid, estate agents paid and legal fees paid.) Alternatively, it could state that 10% of the proceeds are returned to the co-owner.  This means that if the property increases in value they get a better return on their investment.  But, if the property value falls, they will get less.

However, a Declaration of Trust can be as complex as you want.  For instance, the co-owners may be putting differing amounts towards the mortgage repayments and utility bills.  This can be included in the declaration to give an accurate account of each of persons contribution to the property.

What do I do with the Declaration of Trust once we have decided to have one?

Your conveyancer will prepare a declaration following your instructions and send it to you for checking, and then signing.  Read it carefully to make sure that it reflects exactly how you have agreed to own the property.  Once you are happy with it, and your property purchase has completed, your solicitor should ensure that a note is recorded with the Land Registry.  This ensures that on any future sale, the solicitors involved will be aware that the value may need to be split in differing amounts between you.

In the meantime, each owner will be provided with a certified copy of the finalised declaration.  You should all keep your own copies in a safe place – and separately.  You may need to have your own copy if there are any disagreements.  When you sell the property, let your solicitor have a copy of the declaration so that they can split the proceeds appropriately between you.

It is important to note that the declaration is an expression of everyone’s intentions.  However, if there is a later divorce, the courts are able to alter how the value of the property is to be split.  They will take the declaration into account, but will also consider other factors.  These include whether any children are involved, the length of the marriage, and each parties future earning potential.

If you need any further information about owning property jointly, you can get more information from Or call Poole Alcock and one of our friendly conveyancers will talk you through your options: 01270 625478

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