Free Beneficial Ownership Agreement Template

DECLARATION OF TRUST AND BENEFICIAL OWNERSHIP AGREEMENT

Declaration Of Beneficial Interest In Land  ·  England And Wales

This Declaration of Trust (this "Agreement") is made on 1 April 2026 between James Williams of 42 Park Lane, Manchester, M20 6HJ and Emma Johnson of 42 Park Lane, Manchester, M20 6HJ (together the "Parties", who are Unmarried Partners / Cohabitants). The Parties declare the beneficial interests in the Property described in Clause 1 below, in satisfaction of section 53(1)(b) of the Law of Property Act 1925 (declaration of trust respecting land to be manifested and proved by writing signed by the person declaring the trust). This Agreement is intended to take effect as a deed under section 1 of the Law of Property (Miscellaneous Provisions) Act 1989. The Parties acknowledge that, pursuant to Goodman v Gallant [1986] Fam 106, an express declaration of trust is conclusive as between the Parties in the absence of fraud or mistake, and that it will prevail over any common-intention constructive trust (Stack v Dowden [2007] UKHL 17; Jones v Kernott [2011] UKSC 53).

The Property which is the subject of this Agreement is the Freehold property known as:

42 Park Lane, Manchester, M20 6HJ

registered at HM Land Registry under Title Number: GM512345, acquired at the purchase price of £385,000.00, subject to a mortgage to Nationwide Building Society in the principal sum of £288,750.00.

Legal title to the Property is vested in James Williams as sole registered proprietor. The Parties intend that the legal title shall be held on trust for the beneficial owners on the terms set out below (TOLATA 1996 s.1).

Notwithstanding that the legal title is held solely by James Williams, the Parties hereby declare and it is mutually acknowledged that the Property is held on trust for the Parties as tenants in common in equity in the following beneficial shares:

   (a) James Williams: 60%;
   (b) Emma Johnson: 40%.

The registered proprietor holds the legal title on trust for the Parties in the shares declared above, as a trustee of land within the meaning of the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA).

The Parties record their respective financial contributions to the acquisition of the Property as follows:

   (a) James Williams: Deposit of £57,750 (15%) paid from individual savings on completion, plus post-completion mortgage capital repayments as registered mortgagor.
   (b) Emma Johnson: Deposit contribution of £38,500 (10%) paid from individual savings on 14 March 2026, documented by bank transfer reference PLL-2026-031.

These contributions form the basis on which the beneficial shares declared in Clause 2 have been agreed between the Parties.

The sole registered proprietor shall, within 30 days of the date of this Agreement, apply to HM Land Registry to register a Form A restriction on the title of the Property in accordance with section 44(1) of the Land Registration Act 2002 and rule 94 of the Land Registration Rules 2003 (SI 2003/1417), in the following form:

"No disposition by a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court."

This restriction preserves the overreaching protection intended by the Trusts of Land and Appointment of Trustees Act 1996 and section 2 of the Law of Property Act 1925.

In addition, the Beneficial Owner shall be entitled to apply for entry of a unilateral notice (Form UN1) under section 34 of the Land Registration Act 2002 to protect its beneficial interest on the register.

Any rental or other income derived from the Property shall be distributed between the Parties in proportion to their respective beneficial shares: James Williams 60%; Emma Johnson 40%. Each Party shall be responsible for accounting for their own share of rental income to HMRC. The Parties may elect jointly in Form 17 where the Property is held by spouses or civil partners and they wish their actual beneficial shares to apply rather than the 50/50 default under s.837 ITA 2007.

A Party who funds a capital improvement to the Property (from their separate resources) shall be entitled to have the amount of that funding treated as an additional financial contribution, and on a sale the proceeds shall first reimburse that Party for such documented capital improvements before the balance is divided in accordance with the declared beneficial shares. No Party shall be entitled to a beneficial-share uplift from such funding without the prior written agreement of the other Party.

Mortgage payments, ground rent, service charges (where applicable), buildings insurance and other outgoings relating to the Property shall be shared between the Parties in proportion to their respective beneficial shares: James Williams 60%; Emma Johnson 40%.

The Parties shall procure buildings insurance on terms reasonably acceptable to each of them (Trustee Act 2000 s.34). No Party shall knowingly cause or permit the Property to become subject to any further charge or encumbrance without the prior written consent of the other.

On a sale of the Property, the net proceeds (after discharge of any mortgage or other charge and payment of reasonable sale costs) shall first be applied to reimburse each Party for their verified financial contributions (including deposit, mortgage capital repayments and capital improvements documented under Clause 6), and the balance shall then be divided in proportion to the declared beneficial shares: James Williams 60%; Emma Johnson 40%.

Neither Party may sell, transfer, assign, charge or otherwise dispose of their beneficial interest in the Property without first offering that interest in writing to the other Party at fair market value. Market value shall be agreed between the Parties or, failing agreement within 14 days, determined by an independent RICS-registered valuer jointly instructed (or appointed by the President of the RICS on application). The other Party shall have 30 days from receipt of the valuation to accept in writing. If the right is not exercised within that period, the offering Party may proceed with a transfer to a third party on terms no more favourable than those offered. Any disposition under section 53(1)(c) LPA 1925 must be in writing signed by the transferor.

On the death of a Party, the beneficial interest of the deceased shall form part of their estate and shall devolve according to their Will (or, in the absence of a Will, the intestacy rules under the Administration of Estates Act 1925 and Part I of the Inheritance and Trustees' Powers Act 2014). The survivor shall cooperate with the deceased's personal representatives in (a) any necessary application at HM Land Registry to register the death and any new proprietor and (b) any resulting sale or transfer of the Property. The Parties note that where they are spouses or civil partners, transfers between them on death are exempt from inheritance tax under section 18 IHTA 1984; for unmarried / non-civil partners, no such exemption applies and specialist tax advice is recommended. Nothing in this Agreement prejudices any claim under the Inheritance (Provision for Family and Dependants) Act 1975.

Any dispute arising out of or in connection with this Agreement shall first be referred to mediation. The Parties shall attempt to agree upon a mediator within 14 days of written notice of dispute; failing agreement, either Party may request appointment by the Centre for Effective Dispute Resolution (CEDR) or the Royal Institution of Chartered Surveyors (RICS) Dispute Resolution Service. If mediation fails or is not concluded within 60 days, either Party may apply to the courts of England and Wales under section 14 of the Trusts of Land and Appointment of Trustees Act 1996 for an order for sale, partition or a declaration of the Parties' respective interests. The court shall have regard to the factors set out in section 15 TOLATA 1996.

(a) Stamp Duty Land Tax: the Parties have obtained or shall obtain advice on whether any chargeable consideration arises on the execution of this Agreement (for example, the assumption of mortgage debt) for the purposes of Part 4 and Schedule 3 of the Finance Act 2003. A declaration of trust without chargeable consideration is generally outside the scope of SDLT.

(b) Capital Gains Tax: each Party shall account for CGT on their own beneficial share on any future disposal (TCGA 1992 s.60). Spouses and civil partners may transfer between themselves on a no-gain / no-loss basis under s.58 TCGA 1992. Private Residence Relief may be available for a Party occupying the Property as their main residence (TCGA 1992 ss.222-226).

(c) Inheritance Tax: transfers between spouses and civil partners are exempt under s.18 IHTA 1984. Where one Party retains a benefit from gifted property, the Gift with Reservation rules (s.102 Finance Act 1986) may apply.

(d) Matrimonial / family override: the Parties acknowledge that the declared beneficial shares may be overridden by order of the court under the Matrimonial Causes Act 1973 (s.25), the Civil Partnership Act 2004 or Schedule 1 to the Children Act 1989.

(e) Capacity: each Party confirms that they have capacity to enter into this Agreement within the meaning of the Mental Capacity Act 2005 and have received, or have had the opportunity to receive, independent legal and tax advice before signing.

Each Party shall process the other's personal and financial data (including identity documents, bank details, contribution records and tax-status information) only for the purposes of administering the trust, complying with HMRC reporting obligations and any future application under TOLATA 1996 s.14, in accordance with the Data Protection Act 2018 as amended by the Data (Use and Access) Act 2025 (SI 2026/82 in force 5 February 2026) and the UK GDPR. Each Party shall additionally maintain a written record of personal data shared, exchange privacy notices on or before the date of this Agreement, and delete or return the other's personal data within 6 years of full discharge of the trust (or of the termination of any TOLATA proceedings) unless retention is required for limitation, regulatory, tax or testamentary purposes. Where a corporate trustee acts on behalf of either Party, the corporate trustee shall comply with the identity-verification regime under the Economic Crime and Corporate Transparency Act 2023 at Companies House (in force from 2025).

This Agreement and any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it shall be governed by and construed in accordance with the law of England and Wales. Subject to any agreed mediation step, the Parties submit to the exclusive jurisdiction of the County Court at ________ or the High Court of Justice (Chancery Division).

(a) Entire agreement: this Agreement constitutes the entire agreement between the Parties in relation to the beneficial ownership of the Property and supersedes all prior discussions and documents.
(b) Variation: no variation of this Agreement shall be effective unless in writing and signed by or on behalf of both Parties (and, where the variation constitutes a disposition of an equitable interest, in compliance with section 53(1)(c) LPA 1925).
(c) Severability: if any provision is held to be invalid or unenforceable, the remaining provisions shall continue in full force.
(d) Third-party rights: a person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any of its terms, save in respect of a personal representative of a deceased Party.
(e) Counterparts: this Agreement may be executed in any number of counterparts, each of which when executed shall constitute an original, and all counterparts together shall constitute one and the same instrument.
(f) Execution as a deed: this Agreement is executed and delivered as a deed on the date first written above, in compliance with section 1 of the Law of Property (Miscellaneous Provisions) Act 1989.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date indicated.