In Archibald & Anor v Alexander  EWHC 1621 (Ch), the High Court held that a property owned by one sibling was held on constructive trust for her brother and sister who were not on the title deeds. This was the family’s intention when the property was purchased.
It was verbally agreed between brother and sister John and Brenda Archibald, their sister Patsy Alexander and their Mother that a house would be purchased by the family.
- It was to be purchased in the name of the mother with one or more of her children as joint tenants, to be held for the mother for life and her three children equally after her death. This was said to be for Inheritance Tax planning and asset protection in case the mother remarried.
- John and Brenda were unavailable on the day of purchase and so Mrs Alexander became joint-owner with her mother. John and Brenda were never added to the title deeds.
- The mother died and Mrs Alexander became the sole owner. In the first court hearing, the judge found that she held the property on constructive trust for her siblings.
- Mrs Alexander appealed, contending there was no agreement between the family about the property and it was her mother’s intention that she would be the sole owner on her mother’s death.
The High Court judge dismissed the appeal agreeing that there was such an agreement.
- If a property is transferred gratuitously to someone only on the basis of their agreement to hold it on trust for someone else, equity will not allow the transferee to rely on the absence of a formal deed of trust and keep the property for themselves.
The judge took some time to consider the requirements for a constructive trust and whether any detrimental reliance was required to prove the existence of such a trust.
For example, was the fact that John and Brenda Archibald did not have their names added to the property title deeds at a later date, an omission which occurred because they loved and trusted their sister, evidence of detrimental reliance and if so was it sufficient to support a constructive trust existing?
He set out three different types of constructive trusts:
- Parties entering into a joint venture involving land.
- Where it would be inequitable for a landowner to deny a claimant an interest in land.
- Where a person has acted to their detriment in reliance on a common intention for that person to acquire an interest in a property.
He said that here there was an express agreement, not just a common intention or promise and so detrimental reliance was not required and there was a constructive trust for the brother and sister.
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