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Nature and classification of trusts—the nature and classification of trusts

Nature of trustsThe trust conceptTypically, the settlor is the original owner of property and creates a trust by conveying it to one or more trustees and manifesting an intention that it is to be held on trust for one or more beneficiaries or for the accomplishment of a particular purpose. The trustees become owners at common law and hold the property or rights in trust for the beneficiaries (cestuis que trust) or that purpose. The trustees come under an equitable obligation enforceable by the beneficiaries. No trust is created, whatever the intention of the settlor, unless legal title is vested in the trustee (this is known as constituting the trust).DefinitionWhile the trust concept is recognisable, a definition is not so easy.The definition set out in The Law of Trusts and Trustees 10th edition by Underhill and Hayton was adopted by the Court of Appeal in Green v Russell per Romer LJ: 'A trust is an equitable obligation, binding a person (who is called a trustee) to deal with property over...

Creation of trusts—by declaration

Express lifetime declarationsWhere a trust is created by an express lifetime declaration, the settlor simply declares that they hold the trust property on trust for the specified person or object absolutely. The settlor must be unequivocal in their declaration and should communicate the terms of the trust to the beneficiaries. The following must be present:•there must be property capable of being subjected to a trust•the trust must meet the requirements for formal validity•the terms of the trust must be sufficiently certain (essential validity)•the purpose of the trust must not be unlawfulEvidential requirements—personaltyProvided the conditions for the essential validity of the trust are fulfilled, a declaration of trust in respect of personalty (other than an equitable interest) may be declared:•in writing•orally or•(in exceptional cases) by conductThere are no legal requirements as to the form of a declaration of trust of personalty. However, it is good practice to ensure that all the terms of such a trust are contained in a written instrument in order to establish the terms of the trust...

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Letter of claim—constructive trust, requesting an order for sale

Letter of claim—constructive trust, requesting an order for sale Dear [insert firm name] Our Client: [ ] Your Client: [ ] Re: [insert property address] We act on behalf of [ ]. This is a letter of claim in relation to our client’s claim to an interest in the property known as [insert property address] (‘the Property’) pursuant to a common intention constructive trust. As set out below, our client seeks a sale of the Property so that their interest can be realised. Background [Provide a summary of the relevant factual background.] Our client’s common intention constructive trust claim Our respective clients’ course of dealing in relation to the Property summarised above gave rise to a common intention constructive trust pursuant to which your client as sole legal owner holds the Property on trust for themself and our client as beneficial tenants in common in equal shares. Law As the Property was our respective clients’ home, the court will determine our client’s claim by adopting...

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A property is jointly owned and there is a declaration of trust setting out how the property is owned. One joint owner wishes to seek a sale of the property and there is a dispute as to the division of net sale proceeds. Should an application under the Trusts of Land and Appointment of Trustees Act 1996 be commenced under Part 7 or Part 8 of the Civil Procedure Rules 1998?

A property is jointly owned and there is a declaration of trust setting out how the property is owned. One joint owner wishes to seek a sale of the property and there is a dispute as to the division of net sale proceeds. Should an application under the Trusts of Land and Appointment of Trustees Act 1996 be commenced under Part 7 or Part 8 of the Civil Procedure Rules 1998? The Trusts of Land and Appointment of Trustees Act 1996 (TOLATA 1996) affords the court wide powers to deal with trusts of land, including to make a declaration as to the beneficial ownership of the property, to regulate its occupation, to order a sale, and to conduct an equitable account of the dealings of the parties. The court’s powers are primarily contained in TOLATA 1996, s 14, with the court having regard in particular to the factors set out in TOLATA 1996, s 15 when determining whether to make an order. The Civil Procedure rules 1998...

Can a Quistclose Trust arise over the land which was purchased with the money that was loaned for the specific purpose of buying the subject land?

Can a Quistclose Trust arise over the land which was purchased with the money that was loaned for the specific purpose of buying the subject land? A Quistclose trust is a trust which arises in specific circumstances where the court, in circumstances where a payee receives monies on terms that they are to be applied only for a specific purpose, treats the payee as holding that money on trust unless and until the specific purpose has been fulfilled. The trust is named after the House of Lords decision in Barclays Bank v Quistclose but the concept has been recognised for a much longer period. In the eponymous case, the House of Lords held that monies in a bank account against which Barclays had sought to exercise a right of set off were trust monies as they had been paid over for a specific purpose and Barclays was therefore not entitled to do so. A Quistclose trust is therefore a trust in respect of monies in the...

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Commercial weekly highlights—26 June 2025

This week's edition of Commercial weekly highlights includes: judgment of the Court of Appeal in KSY Juice Blends UK Ltd v Citrosuco where the court allowed the appeal, finding that the 2018 contract included an implied term that the price for 800MT of water extracted soluble orange solids would, in the absence of agreement, default to a reasonable or market price, news that the Data (Use and Access) Act 2025 came into force on 19 June 2025, and news that the Competition and Markets Authority has detailed its new enforcement powers under the Digital Markets, Competition and Consumer Act 2024 regarding dynamic pricing practices.

Property Disputes weekly highlights—19 June 2025

This week's edition of Property Disputes weekly highlights includes: analysis of a High Court judgment concerning a landlord overcharging for insurance rent, a Privy Council appeal concerning adverse possession, an Upper Tribunal (Lands Chamber) case overturning a decision regarding an erroneous land transfer and a Sheriff Appeal Court dismissal of an appeal, ruling that there was a broken chain of causation. In addition, there are various updates from the HM Courts Tribunal Service—including announcing mandatory online portal for civil money claims from July 2025 and a new digital query system for legal representatives using the online money claim portals, and minutes of the CPR Committee meeting—9 May 2025.