When a property is registered in one person's name at HM Land Registry, the legal title belongs to that person. But equity — the body of law developed to correct injustice — may recognise that another person has a beneficial interest in the property, even without a formal written transfer. These equitable interests are sometimes described as an "interest behind the curtain" — not visible on the register, but enforceable between the parties and, in some cases, against third parties. For the formal definition of equity, see the equity glossary entry.
Express trusts: the clearest case
If the parties expressly agree that a property is held on trust for another (e.g. "I hold this property on trust for X and Y in equal shares"), an express trust is created. For land, an express declaration of trust must be in signed writing under s.53(1)(b) of the Law of Property Act 1925. An express beneficial interest declared in the transfer deed or a separate trust deed is the clearest and safest way to record it. Where property is bought jointly, the Land Registry form TR1 has a panel (Box 11) to declare the beneficial shares — always complete it. If Box 11 is left blank, the beneficial ownership is presumed to follow the legal ownership (joint tenants in equity) unless evidence shows otherwise.
Resulting trusts: contribution to purchase price
A resulting trust arises where one person contributes to the purchase price of property registered in another's name, without any agreement that it is a gift. The contributing party acquires a beneficial interest proportionate to their contribution. In domestic property cases between cohabitants or family members, the courts now prefer the "common intention constructive trust" analysis (see below) to the resulting trust, but resulting trusts remain relevant in commercial contexts and where the contribution is to a purchase price rather than to mortgage payments.
Constructive trusts: common intention
The constructive trust is the most commonly litigated equitable property right in England and Wales. The leading cases — Lloyds Bank v Rosset [1991] and Stack v Dowden [2007] — establish that a constructive trust arises where: (1) there was a common intention (express or inferred from conduct) that both parties would have a beneficial interest; and (2) the claimant acted to their detriment in reliance on that common intention. In cohabitation disputes, courts look at the whole course of dealing: who paid what, who made what sacrifices, what was said. The TOLATA 1996 governs how the trust is enforced — see the cohabitation rights guide.
Proprietary estoppel: the promise cases
Proprietary estoppel is particularly significant in farming and family home cases. If a landowner made an assurance about rights over land, the claimant relied on it to their detriment, and it would be unconscionable to deny the assurance, the court can award the claimant an interest in the land. The remedy is at the court's discretion — it may be the full interest promised or something less, proportionate to the detriment. The landmark Thorner v Major [2009] UKHL 18 allowed a farm worker to claim the farm on the basis of decades of unpaid labour in reliance on his cousin's informal assurance that the farm would be his. See the estoppel article for the full doctrine.
Practical implications
If you contribute to a purchase price, pay mortgage instalments, fund significant improvements, or are promised an interest in land, document everything. A contemporaneous diary, bank records, and written correspondence are essential if a dispute arises. On buying property jointly, always complete Box 11 of the TR1 to declare the intended beneficial shares — do not rely on verbal agreements. See the home buying legal process article and the cohabitation rights guide for further practical guidance.