How is property dealt with for separating non-married couples? Declarations of trust explained

Updated on 13 March 2025.

When couples who aren’t married or in a civil partnership separate, there can be disputes as to how properties — whether solely or jointly owned — should be dealt with. Some of these claims may reach court under the Trusts of Land and Appointment of Trustees Act (TOLATA).

Here, Amy Harris explains what recent case law means for separating couples who own property, including the difference between a declaration of trust and a common intention constructive trust.
 

What is a declaration of trust?

A declaration of trust is a legally binding document (provided it has been prepared correctly) whereby the legal owners of the property declare that they are holding the property on trust for the beneficial owners. The document sets out the shares in which each respective beneficial interest is held.

There are a number of reasons why people may want a declaration of trust, we have set out a couple of examples below:

1. Buying property

There is no such thing as a common law spouse or civil partner. Therefore, if you are unmarried or do not have a civil partner then you do not have the same legal protection afforded to those that are married or in a civil partnership on the breakdown of your relationship. For married parties or civil partners, the starting point on separation would be a 50/50 split of assets (albeit this may not be the final outcome). If you are unmarried or do not have a civil partner, then a declaration of trust can set out what share of the property you are entitled to on separation. A declaration of trust can therefore increase the certainty as to how the equity in the property will be divided in the future.

2.“The Bank of Mum and Dad”

The parties to the declaration of trust do not have to be the legal owners of the property. For example, parents may contribute to the purchase of their child’s first home and want their contribution recorded so that they can redeem that contribution in the future.

A declaration of trust can record all kinds of things such as:

• The parties’ contributions to the deposits of the property.
• The parties’ future contributions to mortgage repayments and other outgoings.
• Each party’s total share of the property.
• The amount each party will receive on the sale of the property or another specified event.

Depending on your circumstances, if you are not married or in a civil partnership, it may also be worthwhile considering a more detailed deed of trust in the form of a cohabitation agreement.

If the declaration of trust is in writing, it’s commonly referred to as an ‘express declaration’ and may be found in the relevant Land Registry documents or a separate declaration of trust. 

In the landmark case of Stack v Dowden, Baroness Hale considered some of the key legal principles that arise in relation to unmarried couples jointly owning property together. While she stated that an express declaration of trust is usually “conclusive”, she suggested that such an express declaration of trust could be varied by way of a “subsequent agreement”.

It’s unclear what Baroness Hale meant by “subsequent agreement”. This could refer to another written trust deed (a formal agreement that complies with strict property law requirements under the Law of Property Miscellaneous Provisions Act 1989) that varies the existing deed or that a wider range of agreements — such as more informal ones (like a common intention constructive trust).

Common intention constructive trust 

A common intention constructive trust arises when individuals possess a mutual understanding concerning the ownership of a property — regardless of whether that understanding was formally recorded. Such a trust doesn’t necessitate particular formalities and may arise automatically under specific conditions.

A constructive trust allows the court to determine that the beneficial interests in the property are to be held in a specific manner among its co-owners, reflecting their joint intentions. This may also result in conferring a beneficial interest to an individual who doesn’t hold legal title — provided that such an outcome was intended.

The intention of the couple may be ascertained either through their express agreement — regardless of how imperfectly it may be recalled and without the agreement being formally recorded — or through the parties’ actions. The term ‘actions’ encompasses the financial and other contributions made towards the property.

Consequently, if an individual has made financial or other contributions to a property with the anticipation of obtaining a beneficial interest, this may lead to them obtaining a beneficial share in the property through a constructive trust.

This area of law is complex and highly fact specific. 

Nilsson v Cynberg

In the recent case of Nilsson v Cynberg [2024] EWHC 2164 (Ch), a husband and wife bought a property in 2001 and lived in it together, holding it expressly on trust for themselves as joint tenants. 

In 2009 they separated and the husband moved out. The husband and wife reached an understanding that the husband didn’t wish to retain an interest in the property and was happy for the wife to hold a 100% beneficial interest. The property remained in their joint names once the husband moved out and the wife continued to live there with the children. The wife paid all the outgoings — including the monthly mortgage repayments — and spent just over £10,000 on home improvements. The husband contributed nothing.

The couple finalised their divorce in 2018 and subsequently the husband was declared bankrupt later that year. His bankruptcy trustees claimed that the husband held a 50% beneficial interest in the property. In response, the wife initiated legal proceedings — seeking a declaration that the agreement she had reached with her husband established a common intention constructive trust and/or a proprietary estoppel, asserting that she was now the sole beneficial owner. 

The district judge ruled in the wife’s favour, determining that a common intention constructive trust had been established in 2009. The judge noted that the wife had acted to her detriment by assuming responsibility for the mortgage payments, funding home improvements and refraining from pursuing divorce and financial remedy proceedings. 

On appeal, the trustees submitted that the district judge had erred in finding that the express declaration of trust had been varied by the understanding. The appeal was dismissed. 

What does this mean for couples that own property?

It was held by the court that an express declaration of trust was capable of being overridden by a common intention constructive trust. Therefore, the term “subsequent agreement” shouldn’t be interpreted solely as a formal agreement that adheres to the Law of Property (Miscellaneous Provisions) Act 1989 — it may also encompass an informal common intention constructive trust. This interpretation stands in contrary to the judgement in Stack v Dowden.

This decision expands the scope for separating couples who aren’t married or in a civil partnership to deviate from express declarations of trust regarding the ownership of property and may allow them to rely on subsequent conversations and/or conduct to determine the ownership of a property. 

Top tips

• If you have a declaration of trust in place and you are planning on getting married or entering into a civil partnership, we recommend that you take legal advice from a family lawyer well in advance of your marriage or civil partnership so that you can understand how the document will be treated by the family court.
• Depending upon your circumstances you may wish to consider entering into a pre/post-nuptial agreement to seek to protect your interest in a property upon separation. A pre-nuptial agreement would be entered into before your marriage or civil partnership, whereas, a post-nuptial agreement is entered into after your marriage or civil partnership. While such agreements are not 100% legally binding, provided certain guidance is complied with they are more likely to be upheld than not. It is important to take specialist legal advice to determine whether a nuptial agreement is the best way to protect your interests, or whether there may be other options to consider.
   

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