TSEM9610 | Ownership and income tax: implied trust: resulting trust - basic principle

A ‘resulting trust’ is one where the property ‘results’ (reverts, falls back) to the settlor. A resulting trust can occur where purchase costs are provided for property, or funds are provided for a bank account. The case of Pettit v Pettit [1970] AC 777 describes the ‘well known presumption of equity that a person who has contributed a share of the purchase price of a property is entitled to a corresponding proportionate beneficial interest in the property by way of implied or resulting trust’.

A resulting trust gives effect to the settlor’s presumed intention - the ‘presumption’. But see also TSEM9630 about counter-presumptions.

A resulting trust is relatively simple, in that it does not rely on the parties’ conduct. It arises by operation of the law.