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HMRC internal manual

Trusts, Settlements and Estates Manual

From
HM Revenue & Customs
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Ownership and income tax: Specific types of property: land and buildings: example 5: sole name: contributions by A and B but loan by B - no 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. 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 such that B is taxable on 25% of the income.

However, there is evidence that the £50,000 cash provided by B was a loan to A, which A has agreed to repay over 5 years. The presumption that the property is to be held in shares is ‘rebutted’ (TSEM9630), and A is the sole beneficial owner.

All the rents are taxable on A.