The presumption of advancement

Nature of the presumption

In certain relationships, where someone 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 mean to retain an interest in the property concerned.

This old-fashioned rule of trust law, known as the ‘presumption of advancement’, arises as a consequence of a pre-existing relationship between the parties to the transfer or acquisition. It displaces the presumption of resulting trust, which states that where one person transfers property to another without getting anything in return, the transferee is taken to hold that property on resulting trust on behalf of the transferor, unless there is evidence that it was meant to be a gift.

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), 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:

‘…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.’

Husband and wife

The presumption of advancement also arises between a husband and his wife. In Re Eykyn’s Trusts (1877), Malins V-C said:

‘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 19th-century social understanding of a husband’s obligation to provide for his wife, and in Pettitt v Pettitt (1970), Lord Diplock described it as serving no useful purpose in modern matrimonial cases, its relevance being firmly restricted to the ‘propertied classes of a different social era’.

Man and fiancée

The rule also applies where a fiancé gives property to his fiancée (Mossop v Mossop (1988)).

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 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 19th-century concepts of the family; in modern social conditions mothers usually share the responsibility to provide for their children.

Wife and husband

Similarly, no presumption of advancement operates between a wife and her husband. Thus, in Re Curtis (1885), 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. A resulting trust was also presumed in Abrahams v Trustee in Bankruptcy of Abrahams (1999), where a wife contributed to a syndicate purchasing National Lottery tickets in her husband’s name.

Co-habiting couples/mistresses

There is no presumption of advancement between cohabiting couples, whether heterosexual or homosexual (Rider v Kidder (1805)); nor between a man and his mistress (Diwell v Farnes (1959)). The presumption of resulting trust will therefore apply if property is voluntarily transferred in such cases.

Criticism of the presumption of advancement

The rule has been widely criticised as anachronistic. In its consultation on the presumption of advancement, the Law Commission said in particular, the gender bias of the rule is no longer acceptable, given that it contravenes Art 5 of the Seventh Protocol to the European Convention on Human Rights. This states:

‘Spouses shall enjoy equality of rights and responsibilities of a private law character between them, and in their relations with their children, as to marriage, during marriage and in the event of its dissolution.’

In February 2010, the government accepted that the presumption of advancement is discriminatory and should be abolished and introduced amendments to the Equality Bill to this effect. Section 199 of the Equality Act 2010, however, has not yet been implemented, so the rule is still valid.