Declaration Of Trust Tenants In Common Template for England and Wales

A Declaration of Trust Tenants in Common is a crucial legal document that establishes how you and other co-owners hold beneficial interests in property. Unlike joint tenancy where ownership is equal and passes automatically to survivors, tenancy in common allows you to specify exact ownership percentages and ensure your share forms part of your estate upon death.

When do you need this document?

You need this declaration when purchasing property with others but want unequal ownership shares. This commonly occurs when co-owners contribute different deposit amounts, have varying income levels affecting mortgage contributions, or when family members help with property purchases. The document is also essential when converting from joint tenancy to tenancy in common, particularly for inheritance tax planning or when relationships change. Property investors often use this arrangement to reflect different investment contributions and profit-sharing agreements.

Key legal considerations

The declaration must clearly specify each party's beneficial interest percentage, which should total 100%. You should address how ongoing costs like mortgage payments, repairs, and insurance will be shared, as this can affect ownership shares over time. Consider including provisions for what happens if a co-owner wants to sell their share, such as rights of first refusal for remaining owners. The document should also address dispute resolution procedures and decision-making processes for major property decisions. Remember that once ownership shares are established, changing them requires all parties' consent and may have tax implications.

Legal requirements in England and Wales

Under the Law of Property Act 1925, declarations of trust over land must comply with specific formality requirements. The document must be in writing and signed by the person declaring the trust, as required by section 53(1)(b). When registering the property at HM Land Registry, you'll need to apply for a Form A restriction to protect the beneficial interests. The Trusts of Land and Appointment of Trustees Act 1996 governs trustees' powers and beneficiaries' rights, including consultation requirements for major decisions. All parties must be clearly identified, and the property must be precisely described using its registered title number or legal description. Consider the implications under the Perpetuities and Accumulations Act 2009 if the trust arrangement involves future interests or complex beneficial structures.