The presumption of advancement

Nature of the presumption

In some circumstances where a person voluntarily transfers property into the name of another, or contributes to its purchase, the law presumes that a gift was intended and that the transferor/contributor did not intend to retain any interest in the property concerned. This presumption, known as the ‘presumption of advancement,’ displaces the presumption of resulting trust. The presumption of advancement arises as a consequence of a pre-existing relationship between the parties to the transfer or acquisition, where the transferor/contributor is regarded as morally obliged to provide for the person benefiting.

The range of relationships where equity recognises a presumption of advancement reflects a nineteenth-century understanding of family responsibility, and it is clear that, today, the strengths of the presumptions vary to reflect the differing social circumstances.

Relationships giving rise to a presumption of advancement  

Father and child

Traditionally, there was a strong presumption of advancement between a father and his child. In Re Roberts [1946] Ch 1 Evershed J held that the presumption of advancement applied where a father had made payments on a policy of assurance taken out on his son’s life. He said that:

  • ‘…It is well established that a father making payments on behalf of his son prima facie, and in the absence of contrary evidence, is to be taken to be making and intending an advance in favour of the son and for his benefit.

In B v B (1976) 65 DLR, a Canadian court held that the presumption of advancement applied where a father had purchased a winning lottery ticket in the name of his 12-year-old daughter. She was therefore entitled to the winnings absolutely. The rationale for the presumption of advancement between a father and child is that a father, by the very nature of his position, is under a duty to provide for his child. This may include the child’s mother if she is stands in loco parentis. There is no presumption of advancement in the case of other family relationships.

Persons standing in loco parentis

A presumption of advancement also arises between a child and a person standing in loco parentis. The rationale for this extension of the presumption was stated by Jessel MR in Bennet v Bennet (1879) 10 Ch D 474:

  • ‘…as regards a child, a person not the father of the child may put himself in the position of an in loco parentis to the child and so incur the obligation to make provision for the child…’

Husband and wife

The presumption of advancement also arises between a husband and his wife. The principle was stated in Re Eykyn’s Trusts, by Malins V-C:

  • ‘The law of this court is perfectly settled that when a husband transfers money or other property into the name of his wife only, then the presumption is, that it is intended as a gift or advancement to the wife absolutely at once, subject to such marital control as he may exercise. And if a husband invests in money, stocks or otherwise, in the names of himself and his wife, then also it is an advancement for the benefit of the wife absolutely if she survives her husband…’

The operation of the presumption in this context reflects a nineteenth-century social understanding of a husband’s obligation to provide for his wife.

Although these comments were cited in Pettitt v Pettitt [1970] AC 777, the House of Lords acknowledged that the presumption between husband and wife had reduced in significance. Lord Reid suggested that the only reasonable basis for the presumption had been the economic dependence of wives on their husbands, and that given the changes in social circumstances ‘the strength of the presumption must have much diminished.’

Relationships where no presumption of advancement arise

Mother and child

No presumption of advancement arises between a mother and her child, and therefore if a mother transfers property voluntarily to her child the counter presumption of resulting trusts will apply. In Bennet v Bennet, Jessel MR explained the absence of the presumption on the basis that ‘there is no moral legal obligation…no obligation according to the rules of equity-on a mother to provide for her child.’ Again such reasoning reflects nineteenth-century concepts of the family and in modern social conditions mothers almost invariably share the responsibility to provide for their children. Despite the socially archaic rationale, more modern cases have confirmed that there continues to be no presumption of advancement between a mother and a child.

Despite the absence of a presumption of advancement between mother and child the presumption of resulting trust arising in default is relatively weak and easily rebutted.

Wife and husband

Similarly, no presumption of advancement operates between a wife and her husband. So that if a wife voluntarily transfers property into the name of her husband, or contributes to the purchase of property in his name, a presumption of resulting trust arises. Thus, in Re Curtis in the absence of evidence that a gift was intended, a wife was presumed to enjoy the equitable interest in shares, which she had voluntarily transferred into the name of her husband, by way of a resulting trust. The absence of the presumption seems to have been accepted in the more recent case ofMossop v Mossop [1988] 2 All ER, and led to the presumption of a resulting trust in Abrahams v Trustee in Bankruptcy of Abrahams [1999] BPIR 637, where a wife contributed to a syndicate purchasing National Lottery tickets in the name of her husband.

Co-habiting couples/mistresses

There is no presumption of advancement between cohabiting couples (whether heterosexual or homosexual), not between a man and his mistress. The presumption of resulting trust will therefore apply if property is voluntarily transferred in such cases.