When families live together across generations, that can be relevant when couples divorce. The recent case of A v N & R [2025] EWFC 371 (B), shines a spotlight on the increasingly common situation where an elderly parent contributes financially to their adult child’s home, only for questions of ownership to arise during divorce proceedings.
The Background
The parties:
• W (the wife, aged 58)
• H (the husband, aged 54)
• R (the wife’s mother, acting as intervenor)
The marriage: W and H married in 1996 after two years of cohabitation. They separated in 2023 after nearly three decades together.
• The home: In 2012, W and H purchased the family home (FMH) with significant help from R, who contributed £130,000. The property was chosen specifically because it could accommodate a “granny annexe” for R.
The dispute: During the divorce, R intervened, claiming she had a beneficial interest in the FMH due to her financial contribution and the construction of her annexe.
The Legal Issue
The court had to decide whether R’s contribution gave her a beneficial interest in the FMH. This required applying property law principles—specifically constructive trusts—rather than the discretionary family law framework used between spouses.
The court outlined the test:
1. Was there a common intention to share ownership?
2. Did R rely on that intention to her detriment?
3. If so, what share should she receive?
Importantly, the burden of proof lay with R, who was not on the legal title.
The Evidence
• The conveyancing documents described R’s £130,000 as a “gifted deposit.”
• R argued it was either a loan or payment for land/electrical works linked to her annexe.
• The judge found these explanations inconsistent and retrospective.
• Evidence showed R had a long-standing practice of gifting equal sums (around £350,000 each) to her three daughters.
The Decision
The judge concluded:
• The £130,000 was part of R’s lifetime gifts to her daughter W, not a loan or investment.
• Therefore, R had no beneficial interest in the FMH.
• However, the construction of the annexe raised questions about occupation rights, which could potentially give rise to an irrevocable licence or constructive trust of occupation (though this did not translate into ownership of sale proceeds).
Why This Case Matters
This judgment highlights several important points:
• Parents helping children buy homes: Contributions are often treated as gifts unless clear evidence shows otherwise.
• Documentation is critical: Without a deed of trust or written agreement, courts will rely heavily on contemporaneous records like conveyancing files.
• Occupation vs. ownership: Even if money is treated as a gift, parents may still secure rights of occupation, complicating sales or transfers.
• Pragmatism in family law: The court acknowledged the “circularity” of resources—parents’ contributions may leave the matrimonial pot but re-enter when housing needs are assessed.
Takeaway for Families
If parents contribute to a child’s home purchase, clarity is essential. A formal deed of trust or loan agreement can prevent costly disputes later. Without it, courts are likely to presume the money was a gift, especially in parent-child relationships.