FLK2 · Trusts

Resulting trusts

SQE1 revision notes — the key rules, leading cases and common traps for this topic, in plain English and current to 2026.

TR.05 — Resulting Trusts

A resulting trust arises by operation of law: the beneficial interest "results" (jumps back) to the person who provided it. No writing is needed — s.53(2) LPA 1925 exempts resulting, implied and constructive trusts from the s.53(1)(b) signed-writing requirement.

The two categories (Megarry J, Re Vandervell's Trusts (No 2) [1974]):

Automatic resulting trust — an express trust fails or doesn't exhaust the beneficial interest, so the surplus results to the settlor. Triggers: failed trust (uncertainty, no valid object), failure of a condition, surplus after the purpose is met. Vandervell v IRC [1967]: an undisposed-of option resulted to Vandervell, defeating his tax planning.
Presumed resulting trust — equity presumes the provider did not intend a gift. Two situations:
1. Voluntary transfer of property into another's name (real or personal property). For personalty the presumption applies. For land, s.60(3) LPA 1925 may rebut it (debated — arguably no resulting trust presumed on a voluntary conveyance of land).
2. Purchase money contribution — A pays (wholly/partly) for property vested in B's name; B holds for A in proportion to the contribution (Dyer v Dyer (1788)).

Rebutting the presumption — evidence of intention: the resulting-trust presumption is weak and easily displaced by evidence of a gift or loan.

Presumption of advancement (counter-presumption): where the relationship implies a gift — father→child, husband→wife (and persons in loco parentis). It does NOT run wife→husband, mother→child historically, or between cohabitants. Now weak (Pettitt v Pettitt; Stack v Dowden) and due for abolition by s.199 Equality Act 2010 — not yet in force, so still cite it.

Key traps:

Stack v Dowden [2007] / Jones v Kernott [2011]: for the family home in joint names, the common intention constructive trust governs, not the resulting trust. Don't apply purchase-money resulting trusts to domestic joint ownership.
Illegality: post-Patel v Mirza [2016] a claimant can rely on a resulting trust despite an illegal purpose, applying the range-of-factors test (overruling Tinsley v Milligan's reliance principle).
Resulting trusts respond to absence of intention to benefit, not unjust enrichment (Westdeutsche Landesbank [1996]).
A failed charitable gift may pass cy-près instead of resulting if a general charitable intention exists.

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A woman is the treasurer of a small amateur football club. Members pay £20 each month in cash. Under the club rules she accepted on becoming treasurer, she must bank the subscriptions into the club's dedicated account within seven days. One month she receives £200 in subscriptions and spends the cash on her own gas bill that same day. She intends to replace the money from her wages before anyone notices, and pays an equivalent £200 into the club account two weeks later. Which statement best explains how section 5(3) of the Theft Act 1968 applies to the subscriptions when she pays the gas bill?

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Resulting trusts

TR.05 — Resulting Trusts

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