TSEM9620 - Ownership and income tax: implied trust: resulting trust - examples

In the following examples, the presumption of resulting trust is made in the absence of evidence to the contrary.

  1. A provides £200,000 for income-generating property which is purchased in the name of B. There is a presumption of a resulting trust, whereby B holds the property on behalf of A. B is the legal owner, and A is the beneficial owner. A is taxable on all the income.
  2. A provides £150,000 and B provides £50,000 for the purchase of income-generating property, held in the name of A alone. A is the legal owner. There is a presumption of a resulting trust, whereby A holds the property as trustee for A and B to the extent that the beneficial interest in the property is held 75% for A and 25% for B. Each contributor is presumed to have intended to have a beneficial interest in proportion to his or her own contribution. A is taxable on 75% of the income, and B on 25%.
  3. A contributes 100% of the funds in a savings account in the name of A and B. There is a presumption of a resulting trust, whereby A holds 100% of the beneficial interest in the funds. A is taxable on all the income. (But if A and B are husband and wife or civil partners, see TSEM9800.)