Deed of Assignment vs Deed of Trust: What’s the Difference?

When it comes to property ownership in the UK, understanding the different legal documents involved can make all the difference – especially if you’re transferring or clarifying ownership rights.

Two terms that are often confused are Deed of Assignment and Deed of Trust. Although they both relate to ownership and beneficial interest in property, they serve very different purposes.

What is a Deed of Assignment?

A Deed of Assignment is a legal document used to transfer a beneficial interest in a property from one party to another. This is particularly useful when one owner wants to relinquish their share of the property without selling it on the open market.

Common situations where this applies include relationship breakdowns, gifting property to a family member, or adjusting ownership shares between joint owners.

The key point is that the legal title to the property does not change; it’s the beneficial interest that is reassigned. For example, if John and Sarah own a property as tenants in common and John wants to transfer his share to Sarah, a Deed of Assignment can be used to formalise that transfer.

What is a Deed of Trust?

A Deed of Trust, also known as a Declaration of Trust, is a document that records the ownership shares and intentions of the property owners. It’s usually created when two or more people buy a property together, especially if they are contributing unequal amounts to the purchase price or mortgage.

This document outlines:

• The percentage of the property each person owns
• How sale proceeds should be split
• What happens if one party wants to sell or exit the agreement

A Deed of Trust does not transfer ownership; instead, it protects the existing beneficial interests and provides legal clarity. It can be crucial in avoiding disputes later down the line, particularly for unmarried couples, friends buying together, or family members supporting with deposits.

Key Differences

Which One Do You Need?

If you’re looking to give away or transfer your share in a property, a Deed of Assignment is the correct legal instrument. If you’re buying a property with someone else and want to protect or define your investment, a Deed of Trust is the more appropriate choice.

In some cases, you may even need both: for example, if you are transferring your share to someone else and want to record how the remaining interest will be held.

Navigating the legalities of property ownership can be tricky, but getting the right documentation in place is essential to protect your rights and avoid costly misunderstandings. Always seek advice from a qualified conveyancer or solicitor when preparing or signing either type of deed.