Family members frequently pass properties between each other without any money changing hands. However, as a High Court case showed, not all such transfers are by way of outright gift and it is vital to seek professional help in accurately recording the legal basis on which they are made.
The case concerned an investment property transferred by a businessman to his ex-wife. He asserted that they explicitly agreed at the time that she would hold it as a nominee only and that she would transfer it back to him at any time on his request. There were, however, no contemporary documents to support his case and she contended that the property was an unequivocal gift.
Ruling on the dispute, the Court noted that the Land Registry recorded the ex-wife as the property’s legal owner. Given the absence of anything in writing to indicate that she held it on trust for the businessman, there was a presumption in law that she was also its beneficial owner.
However, the Court found on the evidence that he had succeeded in rebutting that presumption. He had throughout managed the property and retained rent paid by tenants. Text messages between the former couple clearly indicated their mutual understanding that the property was his. Upholding the businessman’s case, the Court found that his ex-wife held the property on constructive trust for his sole benefit.
If you would like specific advice regarding property trusts, we can help. Contact our Private Client team today on 01380 722311.
