CG65423 - Private residence relief: settled property: common intention constructive trusts: establishing common intention

TCGA92/S225

The common intention that the occupier should have an interest in the property can either have been expressly agreed by the parties or it has to be inferred from their conduct. In Lloyds Bank v Rosset, [1991] 1 A.C 107 at 132 E-F Lord Bridge says,

The first and fundamental question which must always be resolved is whether, independently of any inference to be drawn from the conduct of the parties in the course of sharing the house as their home and managing their joint affairs, there has at any time prior to acquisition, or exceptionally at some later date, been any agreement, arrangement or understanding reached between them that the property is to be shared beneficially. The finding of an agreement or arrangement to share in this sense can only, I think, be based on evidence of express discussions between the partners however imperfectly remembered and however imprecise their terms may have been.

There are two important points in this passage.

  • The common intention must normally exist at the time the property was acquired. See CG65424.
  • Look for evidence of an agreement before considering the conduct of the parties. See CG65425.