This blog post has been contributed by Amanda Taylor, Teaching Fellow for Undergraduate Laws.
The presumption of a resulting trust is a well established basis for trying to decide to who is the rightful owner of money when it has been used to purchase property in the name of another, or in the joint names of the payee and other person. It is quite a simple idea and stems from the thought that it is unlikely that the payee considered the money as a gift. However, that presumption is not equally shared between the parents of children and this important point is the source of many an interesting case. Let me explain further.
Suppose a Father wishes to help out his son or daughter to make a down payment for a place to live; Was Dad thinking to himself, ‘I’ll just pay for the deposit now and then when my child gets a job, they can pay me back?’ Or, did he think, ‘I’ll give this money as a gift as I am happy to back my child and I can afford to pay this lump sum out and do not need it back’? Quite frankly it’s the kind of question that may never be asked as many such transactions are funded without formal agreements being drawn up.
So, the question arises, what was Dad’s intention? The law takes it, generally, as stated above that when money has been used to purchase property in another’s name it is presumed that the purchaser wants their money returned, hence the presumption of a resulting trust. The presumption is easily rebutted with evidence to prove a different intention but, the law has to start somewhere. Now what is odd is that in the scenario I have painted above the law will not start from that presumption at all. Because it is the Father paying over the money the law has the antiquated presumption that the Father did mean it to be a gift to the child, under what is called the Presumption of Advancement. Again, the presumption is easily rebutted with evidence… however, note that I have been talking about good old Dad paying over the money; What about the position for Mum? Surely the same criteria must apply? But no, the law here is so old fashioned and out of date that it seems to contradict the legal position taken by the country and tells us that the Presumption of Advancement is only applicable to the Father of the child, or someone acting in loco parentis to a child under 18, and indeed equally works for the husband paying for something in his wife’s name.
You must surely wonder why the law is so out of step with the real world? The history of the Presumption of Advancement goes back to the times when the husband was deemed responsible for his wife and children and as an historical piece of legislation has some merit. However, in the year 2021 it is out of place and, I hesitate to assert, illegal.
The interesting thing about this seemingly innocuous presumption is that in the Equality Act of 2010 at s199 you will find, and I quote:
“Abolition of presumption of advancement
(1)The presumption of advancement (by which, for example, a husband is presumed to be making a gift to his wife if he transfers property to her, or purchases property in her name) is abolished.”
Will someone please explain? What needs to be further explained is that although s199 is clearly written into the Equality Act 2010, it has not yet been brought into force, or commenced, so there it sits, useless.
The question has to be, why? No explanation is forthcoming so one can only opine on reasons; it would leave a gap in the law or it is not really given much credence anymore.
The real reason may never been understood, but at present and seemingly for the foreseeable future, men and women stand on an unequal footing as far as the law is concerned.