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.