Buying property with another person is a significant financial commitment, often involving cohabiting partners, family members or business associates. In England and Wales, joint ownership is typically registered either as a joint tenancy or a tenancy in common. When entering into a joint tenancy, many buyers consider a declaration of trust to clarify financial interests, intentions and what should happen in future scenarios such as sale or separation.
At Blackstone Solicitors, we advise clients on all aspects of property ownership and co-ownership agreements. This article explores how declarations of trust relate to joint tenancies, their legal significance, and the practical implications for owners.
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What Is Joint Tenancy?
Joint tenancy is a form of legal ownership where:
- Two or more individuals own the entire property together
- There is no defined share allocated to each party
- All parties have equal rights to the whole property
- Upon death of one co-owner, the property passes automatically to the survivor(s) under the right of survivorship
Joint tenancy is commonly used by married couples or civil partners for its simplicity and succession benefits. However, it may not always reflect unequal financial contributions or personal arrangements.
What Is a Declaration of Trust?
A declaration of trust, sometimes referred to as a trust deed, is a legally binding document that sets out the true intentions of co-owners regarding the property.
It typically includes:
- Ownership proportions
- Initial contributions towards deposit and purchase price
- Ongoing contributions to mortgage, repairs and other costs
- Terms for sale or buy-out
- Provisions for dispute resolution
- Directions for proceeds upon sale
The declaration of trust is separate from HM Land Registry records and creates a legally enforceable arrangement between the co-owners.
Can You Use a Declaration of Trust with Joint Tenancy?
Yes, but with important limitations and implications.
Since joint tenancy does not allocate distinct shares to owners, a declaration of trust seeking to record unequal financial contributions may not be fully effective unless the joint tenancy is severed and ownership is converted to tenancy in common.
Otherwise, the declaration may contradict the legal ownership registered at the Land Registry, potentially leading to disputes or confusion.
To ensure legal consistency, co-owners may:
- Sever the joint tenancy
- Register the property as tenants in common
- Execute a declaration of trust confirming ownership shares
This arrangement allows for tailored financial terms and clearer succession planning.
Common Scenarios for Declaration of Trust in Joint Ownership
- Unequal Financial Contributions
Where one party pays a larger deposit or covers more of the mortgage, a declaration of trust can record this, ensuring fair distribution of proceeds.
- Non-married or Cohabiting Partners
Unlike married couples, cohabitants do not benefit from automatic inheritance rights. A declaration of trust can protect each party’s interest and offer clarity upon death or separation.
- Family Purchases
Parents contributing funds to help children buy property may wish to record their investment via a declaration of trust.
- Shared Ownership Between Friends or Investors
A trust deed outlines commercial terms, exit strategies and financial returns, reducing the likelihood of disputes.
Contents of a Declaration of Trust
A well-drafted declaration of trust may include:
- Names and roles of the co-owners
- Details of the property and purchase date
- Ownership shares and financial contributions
- Payment responsibilities, including mortgage and bills
- Sale procedures, including right of first refusal
- Mechanisms for buy-out or transfer of shares
- Dispute resolution provisions
- Succession intentions and death provisions
- Signatures and witness confirmations
At Blackstone Solicitors, we tailor trust deeds to clients’ individual needs, ensuring alignment with legal ownership and clarity in future transactions.
Practical Implications
Taxation
Declarations of trust can affect capital gains tax (CGT) liabilities upon sale, especially where unequal shares are declared. Proper legal and tax advice is crucial.
Mortgage Arrangements
Some lenders may wish to review the trust deed, particularly where ownership shares are unequal or third parties have an interest.
Probate and Inheritance
Without severance, joint tenancy means the property automatically passes to the survivor(s), regardless of any declaration of trust. To avoid unintended succession, legal structure must match ownership intent.
Risks of Not Having a Declaration of Trust
Failing to formalise financial arrangements can lead to:
- Disputes over sale proceeds or occupation rights
- Unequal benefit despite unequal contributions
- Difficulty proving ownership shares if challenged
- Inheritance complications upon death
Verbal agreements or informal arrangements offer little legal protection. Documenting ownership intentions is essential for both financial and legal certainty.
Severance of Joint Tenancy: Why It May Be Needed
If parties wish to own defined shares and benefit from a declaration of trust, severance of joint tenancy is typically required.
This involves:
- Serving notice of severance on co-owners (formally or by conduct)
- Updating HM Land Registry records to reflect tenancy in common
- Executing a declaration of trust confirming shares and arrangements
Blackstone Solicitors can manage this process end to end, ensuring legal compliance and protection of interests.
How Blackstone Solicitors Can Help
Our property and private client teams provide comprehensive services including:
- Drafting bespoke declarations of trust
- Advising on ownership structure and tax implications
- Managing severance of joint tenancy
- Registering property interests with HM Land Registry
- Resolving disputes over joint ownership
- Supporting cohabiting couples, families and investors
We act with clarity, diligence and empathy—helping clients secure their position and avoid future conflict.
Final Thoughts
Joint property ownership can be a practical and beneficial arrangement—but it must be underpinned by clear legal documentation. While joint tenancy offers simplicity, it may not reflect personal or financial realities. A declaration of trust provides vital clarity, ensuring that contributions, responsibilities and entitlements are understood and enforceable.
At Blackstone Solicitors, we help clients across England and Wales protect their interests in jointly owned property, offering legal solutions that are pragmatic, precise and tailored to life’s real complexities.
How we can help
We have a proven track-record of helping clients dealing with joint tenancies. We are a multidisciplinary firm and have all the expertise inhouse to satisfy the most exacting requirements of our clients. We will guide you through all the necessary legal due diligence in a comprehensive and timely manner. We firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting.
How to Contact Our Residential Property Solicitors
It is important for you to be well informed about the issues and possible implications of buying a residential property. However, expert legal support is crucial in terms of ensuring a positive outcome to your purchase.
To speak to a member of our New Enquiries Team today, simply call us on 0345 901 0445, or click here to make a free enquiry. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.
Disclaimer: This article provides general information only and does not constitute legal advice on any individual circumstances.
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