If you are thinking about buying property with someone else, or you are receiving help from somebody in order to make the purchase, you may have heard about something called a Declaration of Trust. In today’s post, we’re going to take an in depth look at these documents to find out exactly what they are all about.

Let’s dive straight in with an explanation of the term first, shall we?

What is a declaration of trust?

couple signing declaration of trust

A declaration of trust (sometimes also referred to as a deed of trust, despite some slight differences between the two) is a legally binding document that clarifies the financial details of all parties involved in the purchase of a property. 

The declaration of trust will be drawn up at the time of purchase and it outlines who owns what (in terms of their share of the property) and details what will happen if the property is sold by mutual agreement or if one of the owners wants to buy the other out.

What does a declaration of trust do?

In short, a declaration of trust is a way to protect the interests of everyone involved in the process of purchasing a property. Having a declaration of trust in place will mean that all will get what they are entitled to in relation to their initial investment when the whole property is sold or when they want to sell a share of it. 

Without a declaration of trust, repayment amounts and who is owed what can be thrown up for question.

What should be included in a declaration of trust?

A declaration of trust, by its very nature, cannot be a standardised document, so your solicitor should work with you to create a personalised deed which lays out all of the necessary clauses your purchase requires.

That being said, there are certain details all declaration of trust documents should include, such as:

  • The amount each party has put towards the purchase
  • What the percentage split will be between the owners
  • How the mortgage repayments will be met
  • Repayment terms for the mortgage relating to each party
  • What happens to the proceeds resulting from the sale of the property
  • What the split will be between all parties when the sale is made
  • An agreement over how the property will be valued

Reasons why you might need a declaration of trust

Reasons for needing a declaration of trust generally fall into one of two scenarios:

  • Buying property with someone you are not married to, i.e. a friend or partner
  • Receiving financial help from someone else to purchase the property, i.e. parents (AKA Bank of Mum and Dad)


In some cases, both of the above will apply. 

It is, however, important to note that a declaration of trust isn’t a legal requirement, even if you fall into one of the scenarios outlined above. Many parents, for example, are happy to ‘gift’ their children cash, which they then put towards a property deposit without any expectation of a return. In this instance, a declaration of trust wouldn’t be necessary.

If, on the other hand, the property purchase is seen as an investment by any of the parties involved, a declaration of trust is an essential document to have drawn up.

Cohabitation and declaration of trust

Cohabiting couples are on the rise, and many will buy property together way before they decide to get married…if they ever do. While it’s incredibly difficult to talk about any potential breakdown in the relationship, this is one situation where it would be prudent to do so. 

Putting your head in the sand isn’t a wise decision when you’re making what may well be the single biggest purchase of your lifetime. Talk it through and draw up a declaration of trust before you buy property together.

What happens to a declaration of trust when you get married?

Some declaration of trust documents will have provisions for marriage prewritten into them, but they are not always incontrovertible. For the most part, the declaration of trust will be replaced by section 25 of the Matrimonial Causes Act 1973.

Speak with your solicitor and ask them to check your existing declaration of trust to find out exactly where you stand and what the best course of action would be in your situation. 

Declaration of trust and joint ownership

As we discovered in this article, there are two ways in which a property can be jointly owned: either as joint tenants or as tenants in common. If a declaration of trust is required, the property must be held as tenants in common, even if a joint tenancy is currently in place. 

Thankfully, switching from joint tenants to tenants in common (otherwise known as a severance of joint tenancy) is a pretty painless process.

Can a declaration of trust be changed?

The short answer is, yes, a declaration of trust can be amended and updated, but only if all parties included in the document agree to the proposed changes. Small changes can be added to an existing declaration of trust with a deed of variation, but major amendments are often better dealt with by way of an entirely new declaration of trust being written.

Regardless of whether you intend to buy with or without a declaration of trust, you’ll need the right people by your side. Petty’s have been helping buyers just like you find their next home for well over a century, and we’d love to assist you as well. Speak to a member of our friendly team today to find out how we can help you make your property dreams come true.

Article By: Gregory Moore

Gregory has been in the industry for over 15 years. He has an innate ability for negotiation and management, which makes him an immensely valued part of the team. He’s also an enthusiastic fisherman who puts his family, and Shih Tzu, Elmo, first.

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