Parents gifting my a larger share of property

[jay212]

My parents and I purchased a house together; its the only residential property any of us own we all live the same house. They had a declaration of trust drawn up outlining the shares between myself and them, based on our contribution to the deposit and ongoing mortgage repayments. The dec of trust made clear that the percentage ownership would change as we paid off the mortgage. The monthly payments were made from my account but they would sometimes make large payments against the mortgage.
After we had paid of the mortgage they decided to gift me a larger share, more than my contributions. However, we never created a new declaration / deed of trust, rather we just wrote a document which had the new split and signed it, from reading online about how people should record gifts they had given / received this seemed is sufficient for gifts.

We are careful to pay our own bills to ensure it doesn't become' gift with reservation'

Is such a document legally valid. Its signed by all 3 of us or do we need to sign a new dec of trust to make it official? One concern is that if we sign a new dec of trust then the 7 year rule will restart from 2018, rather than from 2013.

[AGoodman]

It is probably okay - a transfer of such an interest need only be in writing and signed but I would still get a deed in place - primarily because a gift is arguably unenforceable unless made by deed. It's unlikely to be a problem but if there is substantial value involved or other parties could disagree, a deed would put it (virtually) beyond doubt.

[someone]

I'm pretty sure the law (not tax law) says that transfers of property must be in writing and must be witnessed (must be a deed).


Think I've found it:

Law of property act 1925 s52

https://www.legislation.gov.uk/ukpga/Geo5/15-16/20/section/52

[maths]

The law is not quite as straight forward as you suggest.

When looking at LPA 1925 it is necessary to identify whether s53(1)(b) or 53(1)(c) applies.

Under the former, declaration of trusts of land need to be evidenced in writing but the declaration itself does not need to be in writing.

Under the latter, a disposition of an equitable interest must be in writing.

However, the law does not require use of a "deed" even though invariably a deed is adopted.

[jay212]

Thanks all who've answered. I have had a look at s53(1)(b) or 53(1)(c) but am none the wiser as to which provision would apply. We have an existing declaration and we are updating the ownership.

In either case is a signed statement between me and my parents outlining the new split sufficient or do we need to get another trust deed done in which case, I am guessing, the clock restarts on the 7 year rule.

[AGoodman]

No, a deed isn't essential to transfer an equitable interest (as here), s.52 only applies to a legal interest.

As you've done it in writing, it should be fine but if any doubt, a deed would confirm it.

It could be a confirmatory deed, reciting that the gift was made on [ ] and declaring how the property is held now.