Common errors about resulting trusts

This post has been contributed by Professor Robert Chambers, Module Convenor for Equity and trusts.

Materials5As the new calendar year begins, most students of Equity and trusts begin to study resulting trusts. They were introduced to them early in the module and now learn in more detail when and why they arise. Perhaps the most difficult part of this topic is understanding the role of the presumptions of resulting trust and advancement. At any rate, this seems to be a common source of errors that examiners encounter in answers to questions about resulting trusts. The purpose of this post is to help you recognise and avoid those errors.

The presumptions are rebutted by evidence of intention

Students sometimes say that the presumption of resulting trust is rebutted by the presumption of advancement, or vice versa, but that is incorrect. A presumption arises when a transaction looks superficially like a gift, but we do not know whether a gift was intended. The relationship between the parties will determine which presumption applies. The presumption of advancement applies if the apparent donor is the father of, or standing in loco parentis to, the recipient. It might also apply if she is the recipient’s mother, but that is not clearly established in English law. While it also applies to apparent gifts from husbands to wives, that is complicated when it comes to co-ownership of the family home (which you study in LA3003 Property Law).

Once the appropriate presumption is selected, we then look for any evidence whether a gift was intended or not. Evidence of an intention to give will rebut the presumption of resulting trust, while evidence that no gift was intended will rebut the presumption of advancement. It is the evidence of intention that rebuts the presumption, not the choice of a different presumption.

The same problem occurs with respect to s.60(3) of the Law of Property Act 1925. If that subsection prevents the presumption of resulting trust from arising (as discussed below), this does not rebut the presumption. It simply means that we have a situation in which the presumption does not apply.

Subsection 60(3) of the Law of Property Act 1925 applies only to gratuitous transfers of land

As discussed in another blog post, it is an interesting question whether s.60(3) of the Law of Property Act 1925 has had any effect on the presumption of resulting trust. There is much that could be said about this topic in an examination. Whatever its effect, it is important to remember that s.60(3) only applies to gratuitous transfers of land, which occur when apparent donors transfer their land to apparent donees. It does not apply to personal property (like goods or company shares) nor it does not apply to cases where land is purchased by the apparent donor in the apparent donee’s name. Failing to distinguish between transfers and purchases of land is a fairly common error. There is no point discussing the effect of s.60(3) in a case where it has no possible application.


Section 199 of the Equality Act 2010 is not in force

If s.199 of the Equality Act 2010 ever comes into force, it will abolish the presumption of advancement with respect to unexplained transactions that take place after that date. It is not yet in force (and may never be). While it might be relevant to mention the existence of s.199 when criticising the unequal application of the presumptions to men and women, that section provides no assistance whatsoever when applying the law to a problem question in which the presumption of advancement might arise.

The presumption of resulting trust does not apply to testamentary gifts

A testamentary gift is a gift made in a will. It is not an unexplained transaction and there is no room for the presumption of resulting trust to operate. We assume that people who make gifts in wills intend to make those gifts.

The presumption of resulting trust is different from the resulting trust

The presumptions of resulting trust and advancement only operate in the absence of admissible evidence of the apparent donor’s intention. If we have evidence that proves that a gift was intended, then there is no resulting trust and it does not matter which presumption applied initially. The outcome is based on proof of intention and not on any presumption of intention.

Conversely, if we have evidence that proves that the apparent donor did not intend to make a gift, then a resulting trust will arise by operation of law in response to the proven facts: Hodgson v Marks [1971] EWCA Civ 8, [1971] Ch 892. The presumptions are irrelevant. As Lamm J stated in Mackowik v Kansas City (1906) 94 SW 256 at 262, “Presumptions may be looked on as the bats of the law, flitting in the twilight but disappearing in the sunshine of actual facts.”

When dealing with a question involving the presumptions of resulting trust and advancement, you should determine which presumption applies and then consider whether there is evidence of intention that can rebut or displace it. In most reported cases, the presumptions of resulting trust and advancement are rarely needed because courts are willing to decide what the parties probably intended based on minimal circumstantial evidence: Lohia v Lohia [2001] EWCA Civ 1691.



  1. Good morning professor,

    I have one question. Do we need to read any text book on Property law (along with Equity law books) to do better in Equity & Trust law examination?

    Kindly guide me.


    1. Dear student,

      Thank you for your email, here is Professor Rob Chambers’s response:

      The knowledge of property required to successfully complete the Equity and Trusts module is fairly basic. Everything you need can be obtained from the module guide, the recommended textbook (Penner), and the statute book. You should understand the difference between personal rights (i.e. rights in personam enforceable against specific persons) and property rights (i.e. rights in rem enforceable generally against other members of society), the difference between legal and equitable interests, that title to land and title to shares in a private company are normally transferred by registration, the difference between inter vivos transactions (i.e. during life) and testamentary dispositions (i.e. upon death), and the formalities normally required to declare an express trust of land, to make a testamentary trust or to assign an equitable interest. This is not an exhaustive list of the property concepts that you encounter in the Equity and Trusts module, but gives you an idea of the basic level of property knowledge that is required.

      In a property law textbook, you would encounter in detail many concepts that you do not need to know for trusts, such as the mortgagee’s power of sale, easements, and leasehold covenants. Reading such a book at this stage may confuse you more than it helps and distract you from your study of equity and trusts.

      I hope this helps.

      Undergraduate Laws

      1. Good professor Chamber,

        I am extremely grateful for your suggestion. I will definitely read any property law book before exam. So, that I can do well.

        With Regards,
        Annesha Kar Gupta

  2. Good morning Professor,

    I have one more question. HST can be identified because on the face of the will, there must be some mentions.
    But How Full Secret Trusts can be identified which don’t have any mention on the will & if the trustee had fraudulent intention?

    I am extremely grateful for your kind help & suggestion. Please help me on this aspect.

    With regards,
    Annesha Kar Gupta

    1. Dear Aneesha,

      Professor Robert Chambers has suggested the following response:

      A testator who wants to create a fully secret trust and communicates her or his wishes only to the intended secret trustee is taking a risk that his intended trustee might fail to perform the trust. Since no one else would know, we have no way to find out how often that actually happens. In all the reported cases, the intended trustee was acting honestly.

      Best wishes,
      Undergraduate Laws

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