Constructive Trust

HMRC's own internal guidance on the legal background to trusts states the essence of the doctrine plainly: 'A constructive trust is imposed by the rules of equity. It must satisfy the demands of justice and good conscience.' Unlike an express trust, no one has to intend, in a formal document, to create it — the law imposes it regardless.

The most common context in practice is a family home held in one person's name, or held without a written declaration of the parties' shares. HMRC's guidance on this situation explains that establishing a constructive trust in that context 'involves establishing a common intention to share the beneficial ownership or create a beneficial interest.' Where a couple's conveyance is silent on how they hold the property between themselves, a person who contributed to the purchase price may be able to rely on the doctrine to establish a proportionate beneficial interest, unless an express declaration of trust already settles the point.