Declaration of Trust

Author: Chris Watts — Will Writer, Fern Wills & LPAs

Last verified: October 2025 (England & Wales)

Why Declarations of Trust Matter

Imagine buying a home together — you pay most of the deposit, your partner covers the mortgage, and a few years later, one of you moves out or wants to sell. Who gets what share? Without a Declaration of Trust, the answer can become messy, emotional, and expensive.

A Declaration of Trust — sometimes called a Deed of Trust — is the calm, written agreement that prevents that scenario. It records each person’s contribution, sets out how the equity is divided, and explains what happens if one party leaves, sells, or contributes differently later.

While the Land Registry only shows whose names are on the title, a Declaration of Trust provides the detail that matters, who owns what share, and why. It is especially valuable for unmarried couples, friends, relatives, or business partners purchasing property together.

When You Might Need One

Typical situations include:

• One person provides a larger deposit or pays more toward the mortgage.
• Parents or relatives contribute to the purchase.
• Friends or business partners invest jointly.
• Couples with buy-to-let property want to divide income tax-efficiently.
• A person contributes financially to a home they are not named on.

A Declaration of Trust formalises those arrangements and protects everyone involved if circumstances later change.

What the Document Covers

A well-prepared Declaration of Trust will:

• Record initial contributions such as deposits or gifted funds.
• Specify how mortgage payments and costs are shared.
• Define each owner’s percentage share and how sale proceeds are split.
• Outline what happens if one owner sells or buys the other out.
• Set rules for dividing rental income or capital growth.
• Be properly signed and witnessed so it is legally binding.

Benefits and Key Considerations

• Clarity and transparency — everyone knows the financial position.
• Dispute prevention — avoids future disagreements about fairness.
• Tax efficiency — enables income or profit to be shared in a suitable ratio.
• Flexibility — can be updated if circumstances or ownership change.
• Protection — recognises contributions even when not on the title deeds.

Before drafting, all parties should agree on the terms and seek advice to ensure the document reflects their true intentions.

Case Study Scenarios

1. Unmarried Partners Buying Together

An unmarried couple buy a home using unequal deposits. Their Declaration of Trust records each partner’s share, ensuring fairness if they later separate or sell.

2. Friends as Joint Investors

Two friends buy an investment property. One pays a larger deposit while both share the mortgage equally. The Declaration reflects these differences, avoiding conflict over profit or resale.

3. Business Partners Acquiring Property

Business colleagues purchase a commercial unit. The Declaration confirms how each partner’s contribution is treated and sets an agreed exit route if one leaves.

4. Family Financial Assistance

Parents help a child with a deposit. The Declaration clarifies whether the funds are a gift or loan and how this affects ownership.

5. Contributions Without Being on the Mortgage

A partner contributes to the deposit but cannot join the mortgage. The Declaration protects their contribution by defining their beneficial interest.

6. Buy-to-Let Tax Efficiency

A couple owns a rental property that generates £1,000 in net income each month. One pays 20% tax, the other 40%. A Declaration of Trust redistributes ownership 90:10%, reducing their combined annual tax bill by around £960.

Process and Professional Involvement

We’ll explain what a Declaration of Trust involves, outline your options, and take the key details. From there, we’ll introduce you to a trusted specialist solicitor who will handle the drafting and registration directly with you. We only work with professionals who share the same standards of clarity, care, and integrity you expect from Fern Wills & LPAs.

(Preparing and registering a Declaration of Trust is a restricted legal activity under current regulations, which is why Fern Wills & LPAs coordinates with approved solicitors for formal execution and registration.)

Frequently Asked Questions

When should I create a Declaration of Trust?

As early as possible — ideally before or at the time of purchase — to record each party’s contribution from the start.

Can it be changed later?

Yes. If ownership shares or financial inputs change, a new or updated version can be prepared.

Is it legally binding?

Yes. Once signed and witnessed correctly, it becomes a binding agreement between the owners.

Do all contributors have to be on the title deeds?

No. The Declaration can include those who are not registered owners, which is why formal Trust Registration may be required.

What if there’s a dispute later?

Because the terms are recorded clearly, the Declaration provides strong evidence to resolve disagreements fairly.

Key Takeaways

• Record all financial inputs precisely and in writing.
• Keep the Declaration under review if your circumstances change.
• Use an experienced adviser to ensure compliance and fairness.
• Fern Wills & LPAs remain your first point of contact and coordinate the process throughout.

Next Steps

If you’re buying or co-owning property, a Declaration of Trust can protect your investment and prevent costly misunderstandings.

Contact Fern Wills & LPAs today for clear, practical advice. We’ll explain your options and, where appropriate, connect you with a trusted specialist solicitor who completes your Declaration with the same professionalism and care you expect from us.