Ownership and income tax: implied trust: constructive trust - basic principles
In the context of this guidance, the basic principles are that to establish a common intention constructive trust three questions have to be answered in this order:
- Was there an agreement or common intention that the parties should share beneficial ownership of the property? See TSEM9720.
- If so, did the party claiming act to his or her detriment (disadvantage) in reliance on that agreement or common intention or change his or her position? See TSEM9730.
- If so, what is the size of the beneficial interest to which the claimant is entitled? See TSEM9740.
If taxpayers attempt to rely on the decisions in the cases of Oxley v Hiscock  3 All ER 703) (sole legal title) or Stack v Dowden  UKHL 17) (joint legal title), you should point out that those cases relate specifically to the ownership of the matrimonial or quasi-matrimonial home. The cases are likely to be of limited application where it is not ownership of a domestic home that is at issue, but land or buildings rented or personal property.