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HMRC internal manual

Trusts, Settlements and Estates Manual

Ownership and income tax: Specific types of property: land and buildings: example 4: sole name: contributions by A and B - resulting trust

A provides £150,000 by way of bank loan in his sole name and B provides £50,000 cash for the purchase of a house. Both contributions are documented. The land registry documents show that the house is held in the name of A alone. The house is rented out.

A is the legal owner, but says there is a resulting trust (TSEM9600).

If there are no counter presumptions (TSEM9630), there is a resulting trust such A and B own the property beneficially in accordance with their contributions - A holds 75% and B holds 25%.

Consequently A is entitled to 75% of the rent and is taxable on 75%, while B is entitled to 25% of the rent and is taxable on 25%.