By Sital Somaiya, Founder and Solicitor. Last reviewed 15 October 2026.
Key points
- A declaration of trust is a signed document recording how the owners of a property share its value.
- If it is properly made, the court will normally treat it as conclusive, which is what stops disputes like Jones v Kernott.
- It can do much more than state percentages: it can ring-fence a deposit, deal with mortgage payments and set out what happens on a sale or buy-out.
- For married couples it is not the final word on divorce, because the divorce court can override it.
Most property disputes between unmarried couples come down to one problem: nobody wrote down what they intended when they bought. A declaration of trust solves that. It is the single most effective way to avoid a TOLATA claim, and it is usually done at the same time as the purchase.
In this guide
- What a declaration of trust is
- The TR1 box versus a separate deed
- What a good declaration covers
- Fixed shares or a formula?
- Gifted deposits from parents
- Married couples: the important exception
- When to sign one
- Declaration of trust or cohabitation agreement?
- If you already own a home without one
- Frequently asked questions
- Talk to us
What a declaration of trust is
When two or more people own property, or one person owns it for others, it is held on trust. A declaration of trust sets out the beneficial ownership: who is entitled to the value, and in what shares. The law requires a declaration about land to be in writing and signed, and in practice it is usually made as a deed.
The courts give it great weight. In Goodman v Gallant (1986) and again in Pankhania v Chandegra (2012), the Court of Appeal held that an express declaration of the shares is conclusive, unless it can be set aside for something like fraud or mistake, or the owners later vary it. That is the protection a declaration gives you.
The TR1 box versus a separate deed
The transfer form you sign when you buy (the TR1) has a short panel for declaring the trust. It lets you say whether you are joint tenants, tenants in common in equal shares, or something else. It is better than nothing, but it can only record a basic arrangement.
| TR1 panel only | Separate declaration of trust | |
|---|---|---|
| Records the shares | Yes, briefly | Yes, in detail |
| Returns a deposit first | No | Yes |
| Deals with unequal mortgage payments | No | Yes |
| Sets out a buy-out right | No | Yes |
| Says what happens if one stops paying | No | Yes |
| Can be updated later | Only by a new document | Yes, by a deed of variation or new declaration |
What a good declaration covers
| Topic | What it records |
|---|---|
| Shares | Fixed percentages, or a formula that works out the shares on a sale |
| Deposit | Whether either owner’s deposit comes back to them first, before the rest is divided |
| Mortgage payments | Who pays what, and whether paying more changes your share or creates a credit |
| Improvements | Whether money spent on works is repaid or changes the shares |
| Sale | When the property can be sold, for example on separation or after notice, and who chooses the agent |
| Buy-out | Whether one owner can buy the other out, how the price is set and how long they have |
| Missed payments | What happens if one owner stops paying their share of the mortgage |
| Occupation | Who can stay living there after separation, and for how long |
| Review | When the declaration should be looked at again, such as on the birth of a child |
Fixed shares or a formula?
A fixed split, such as 70/30, is simple, but it can become unfair if circumstances change. A formula is often better for couples with unequal deposits. A common structure is:
- First, each owner gets back their deposit.
- Then, any money spent on improvements by one owner is repaid.
- Then, the rest of the equity is divided equally, or in another agreed proportion.
This way, a partner who put in a larger deposit is protected without having to own a larger share of all future growth in value.
Gifted deposits from parents
Parents often help with a deposit. If the money is a gift to one of you, a declaration can ensure it comes back to that person on a sale, rather than being shared by default. Lenders usually need a letter confirming it is a gift, with no claim on the property. If the parents want the money back, it is a loan, and that needs to be documented separately, and disclosed to the lender.
Married couples: the important exception
A declaration of trust settles ownership between unmarried couples. For married couples it is different. On divorce, the court divides assets under the Matrimonial Causes Act 1973, and it can make orders that depart from a declaration if fairness or needs require it. The declaration will be taken into account, especially if it protects money brought in from outside the marriage, but it is not binding on the divorce court in the same way.
When to sign one
- When buying together with unequal contributions
- When one partner moves into a home the other owns and is going to pay towards it
- When adding a partner to the title, perhaps on a remortgage
- When a family member helps buy, such as a parent contributing and being a co-owner
- When circumstances change, such as an inheritance paying off part of the mortgage, so the existing declaration needs updating
Declaration of trust or cohabitation agreement?
A declaration of trust deals with one property. A cohabitation agreement covers your wider finances and arrangements as a couple. Many couples have both, and they can be prepared together. Unmarried couples also need wills, and should check whether they are joint tenants or tenants in common.
If you already own a home without one
It is not too late. You can sign a declaration at any time while you agree. Take advice, because if your intentions have changed since you bought, the new declaration needs to reflect that clearly. If you have already separated and cannot agree, the court will decide using the principles in Jones v Kernott and the law on beneficial interests.
An example
Aisha and Ben are buying a house in Gidea Park. Aisha is putting in £60,000 from the sale of her flat, and Ben £15,000. They will split the mortgage equally. Their declaration of trust says that on a sale, Aisha gets £60,000 and Ben £15,000 back first, and the rest is split equally. If they separate, either can give three months’ notice to buy the other out at a valuation by an agreed surveyor, failing which the house is sold.
This is an illustrative example, not a real case.
Frequently asked questions
Is a declaration of trust legally binding?
Yes. If properly made, it is normally conclusive about the shares between the owners. It can be challenged only in limited situations, such as fraud, mistake or a later agreement to change it.
Can one person make a declaration of trust?
Yes. A sole owner can declare that they hold the property partly for someone else, for example a partner who is not on the title. It must be in writing and signed by the owner.
Does a declaration of trust need to be registered?
The declaration itself is not registered, because the title does not show beneficial shares. Where there are co-owners as tenants in common, a restriction is registered on the title. Keep the original document safe.
Can we change it later?
Yes, by signing a new declaration or a deed of variation, if you both agree. If you cannot agree, the existing declaration normally stands.
Is a declaration of trust the same as a deed of trust?
The terms are used interchangeably. A declaration of trust made as a deed is often called a deed of trust.
Sources
- Law of Property Act 1925, section 53, legislation.gov.uk
- Joint property ownership, GOV.UK
- Matrimonial Causes Act 1973, legislation.gov.uk
Talk to us
Signature Law prepares declarations of trust for couples and families buying in Romford, Essex and East London, working alongside our conveyancing team. Speak to our cohabitation solicitors.
Request a callback, or call 01708 398 851.
