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.

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For more information on:

  • Relationships where no presumption of advancement arise
  • Mother and child
  • Wife and husband
  • Co-habiting couples/mistresses