By Alex Lyttle, Associate Partner at Tayntons 

When money passes between family members without legal advice, it is only too common for disputes to arise as to whether the sums concerned were meant as gifts, or something more.

A recent case reflected this. A mother and son ended up at loggerheads over ownership of properties worth £800,000.

The case concerned a flat and a house which were both held in the son's sole name. A family row erupted a number of years after they were purchased with his mother claiming that she had paid the whole of the flat's purchase price and made a significant contribution to buying the house. She issued proceedings, asserting that she was the beneficial owner of the flat and she was entitled to the benefit of a sum equivalent to the proportion of funds she paid towards the house. She claimed both were held by her son on trust for her benefit.

In ruling on the dispute, the judge noted that the son was a successful businessman and would well have been able to afford to purchase the flat for £56,000 without his mother's help. Although she had made payments to him exceeding £60,000 in the years before the purchase, they were gifts and there had been no intention that she would thereby obtain equity in the property. The judge did not accept her belief that she had made payments to her son specifically to enable the flat's purchase was erroneous.

The house had been bought for £375,000 and there was no dispute that the mother had paid her son £111,000 prior to its acquisition. The Court found that, in that instance, the payment had not been intended as a gift and that it entitled the mother to a one-third beneficial interest in the property.

Have any questions or in need of your own legal advice? Contact Alex Lyttle and the team at Tayntons. Telephone 01452 522047, email info@tayntons.co.uk or visit www.tayntons.co.uk.