Common Intention Trusts

You bought the flat years ago so your daughter would always have a home. She has lived there ever since, pays the bills and thinks of it as hers. So do you. But the paperwork still has your name on it, and nobody ever wrote down what was meant.

A common intention trust puts that long-standing family arrangement into writing. It is the deed that records who the home was bought for and sets out what happens next.

What a common intention trust is, in plain English

Families often buy property for each other without writing anything down. Mum and Dad buy a flat for their son. A couple buy a bungalow for an elderly parent. Everyone knows whose home it is, but the Land Registry still shows the person who paid for it as the owner.

The law has a name for that shared understanding: a common intention. Where the people involved all understood that a property was meant for someone other than the legal owner, a trust can exist even though nobody signed a deed. Lawyers call this an implied trust.

The trouble with an implied trust is that it lives in people's heads. There is nothing to show HM Revenue and Customs, nothing on the title, and nothing to guide the family if the owner dies or loses capacity.

A common intention trust deed fixes that. It sets out in writing:

• when the property was bought and who it was bought for
• who lives there (the deed calls them the occupying beneficiary)
• who the trustees are (the people who hold the property and make decisions about it)
• who benefits if the occupier dies or moves out

It is a close cousin of a declaration of trust. A declaration of trust usually just records who owns what share. A common intention trust also covers who can live in the property and what happens to it later.

When one is used

These are the situations we see most often.

A home bought for a son or daughter. You paid for it and it is in your name, but they have lived there as their own home from the start.

A home bought for a brother, sister or parent. The same idea, with a different relative.

A separated couple. One of you moved out years ago and left the house to the other, but the title was never changed.

Names on the title that were only ever names. Children were added to the deeds for a reason that made sense at the time, without ever being meant to own a share.

What these have in common is a gap between what the paperwork says and what the family has always understood.

A common intention trust is usually the wrong fit if the property is let to a tenant, or if your relative pays you rent. For the home you live in yourself, an Estate Allocation Trust is normally the better starting point. If you are not sure whether you need a trust at all, start with Do I Need a Trust?

How it works

1. We listen to the story. Your consultant asks how the property came to be bought and who it was for. This first conversation is free.
2. We gather the facts. When it was bought and for how much, who moved in and when, who pays the bills, whether there is a mortgage, and whether rent has ever been paid.
3. Our legal team review it. They check the arrangement fits before anything is drafted, then prepare the deed and a letter explaining what it does. Squiggle is an estate planning firm, not a firm of solicitors.
4. You read the draft with us. We go through it together in plain English and change anything that does not match your wishes.
5. Everyone signs. You and each trustee sign in front of an independent witness.
6. The Land Registry is updated. The new trustees are added to the title, and a restriction is registered so the property cannot be sold or mortgaged without them.
7. The trust is registered with HMRC. Trusts have to be recorded on HMRC's Trust Registration Service, and we handle that for you. Our Trust Administration factsheet explains what trustees need to keep up to date afterwards.

Alongside the deed you write a letter of wishes. It is not binding, but it tells your trustees what you would like them to do.

Who does what. You are the settlor (the person putting the arrangement into trust), and you choose the trustees. The trustees, usually you plus two or three people you trust, hold the property and make decisions about it. The occupying beneficiary is the relative the home was bought for, and they live there as their home. The other beneficiaries, usually their children or others you name, benefit after the occupier.

A hypothetical example

Margaret bought a flat in 2013 for her son Tom. She paid £160,000 from her savings and the flat went into her name, because that was simplest at the time. Tom moved in straight away. It has been his only home ever since, he pays all the bills, and he has never paid his mum rent.

In 2026 Margaret sits down to update her Will and realises the flat is still legally hers. If she died, it would be dealt with as part of her estate, and Tom's home would depend on what her Will said and who else had a claim.

Margaret, Tom and her daughter Claire all agree the flat was always meant to be Tom's. A common intention trust records that:

• the flat was bought in 2013 for Tom's benefit
• Tom is the occupying beneficiary
• Margaret, Tom and Claire are the trustees
• Tom's children benefit after him

The title is updated, a restriction is added, and the trust is registered with HMRC. On the approach our legal team take, the transfer is treated as made in 2013, so Margaret's seven years ended in 2020.

This is a hypothetical example for illustration only. Your own facts will be different.

Tax in plain English

Inheritance Tax. Inheritance Tax is charged at 40% on what you leave above your allowances. The main allowance is the nil rate band (the £325,000 Inheritance Tax-free allowance each person has).

Our legal team's position is that the trust began when the family arrangement did. The transfer into trust is treated as made at that earlier date, and it used part of your nil rate band at the time. Once seven years have passed from that date, that part of your allowance is available to you again.

If the arrangement began less than seven years ago, the seven years run from the original date. Our Gifts and the Seven-Year Rule factsheet explains how the clock works.

Capital Gains Tax. While the occupier lives in the property as their main home, main residence relief can apply. That makes a future sale simpler from a Capital Gains Tax point of view.

Registration. HMRC expects trusts to be registered. Once the deed is signed, we register it on the Trust Registration Service for you.

How all of this applies to you depends on your dates, the value of the property and the evidence behind the arrangement, and HMRC can ask to see that evidence. Nobody can guarantee a tax result. Your consultant will go through your own position with you before you decide.

Things to be aware of

Rent rules it out. If your relative pays you rent, or you have declared rental income from the property, it is a tenancy. A contribution they make to their own bills or mortgage is different from rent paid to you.

You will be asked for the facts. Purchase date, price, who moved in when and who has paid for what. You may be asked to sign a statement confirming them, so have completion paperwork and old bills to hand if you can.

It is not care fee planning. A council assesses your beneficial interest, so a property that was held for your relative from the start should not be counted as yours. It can still ask for evidence of that, and there is no time limit on how far back it looks. See our Care Fees & Your Home: Myths vs Facts factsheet.

A mortgage adds a step. If there is a mortgage on the property, the lender will normally need to agree before the title is changed.

It is meant to be permanent. The trust cannot be undone because circumstances change, so it needs to reflect what you want for the long term.

The trustees take on real duties. They must act for the beneficiaries, keep records and keep the HMRC registration up to date.

Your Will should match. A Will that still leaves the property to someone else causes confusion, so we review it at the same time.

Common mistakes

Leaving it unwritten. "Everyone knows it's hers" works until the owner dies, remarries or loses capacity. Then the paperwork is all anyone has to go on.

Assuming that living there makes it theirs. Years in a property do not change who owns it.

Calling a contribution "rent". Money that is described as rent, or declared as rental income, makes the arrangement a tenancy.

Adding children to the title to tidy things up. It can create tax and benefits problems for them that nobody intended.

Buying landlord insurance for a relative's home. It suggests a letting, which is the opposite of what you mean.

Waiting too long. The owner has to have mental capacity to sign. Once that has gone, the chance to put things in writing has usually gone with it.

Related factsheets

• Estate Allocation Trust
• Right to Occupy: Property Rights in a Will
• Do I Need a Trust?
• Gifts and the Seven-Year Rule
• Care Fees & Your Home: Myths vs Facts

Questions? Book a free call

If this sounds like your family, tell us the story of the property and we will tell you whether a common intention trust fits, or whether something simpler would do. No pressure, just a friendly chat.

Pick a time that suits you and your local Squiggle consultant will call you. No charge, no obligation. Book a call or call 01233 659 796.

Talk to Squiggle: 01233 659 796 | hello@squiggleconsult.co.uk | www.squiggleconsult.co.uk | Book a free call: meet.squiggleconsult.co.uk

Trust planning should always follow personal advice.

This factsheet is general information for England and Wales, not legal, tax or financial advice, and the rules can change. Last reviewed: October 2026.