It is common for parents to help their adult children buy a home. Sometimes that help comes in the form of a gifted deposit. Sometimes it is a case of moving in, paying for renovations, or funding a small living space of their own.
But what happens years later if the couple separates and the parent has effectively built a second life inside the same home? And what if no one ever wrote anything down because, at the time, it felt unnecessary or awkward?
A v N (R intervening) offers one of the clearest recent answers to these increasingly messy situations.
A family home shared across generations
The case involved a long marriage of almost three decades. The wife (W) and husband (H) purchased their family home in 2012. They could not have afforded it without help from W’s mother (R), who contributed £130,000 towards the purchase. The conveyancing paperwork described it as a “mother gifted deposit”.
From the outset, the plan was that R would live with them. The house was chosen because it could accommodate a self-contained annexe for her. Soon after the purchase, the parties demolished the garage and built a fully fitted ‘granny annexe’. R funded almost all of that work herself. Over the years, she also continued to put money into repairs and improvements, treating the annexe as her own space.
When divorce proceedings began in 2023, all three still lived in the property. R eventually intervened, claiming that she had a beneficial interest and that her contributions were not mere gifts.
What the court decided
The court had to do two things. First, it had to decide whether R had a beneficial interest and, if so, how much. Only then could it carry out the usual financial-remedy exercise between H and W.
The £130,000 at purchase
The judge held that the initial contribution was simply a gift, not an investment. R had made similar lifetime gifts to each of her daughters, and the £130,000 fitted within that pattern. This matched the contemporaneous description on the conveyancing documents.
The annexe
The annexe told a different story. R had paid for the design, construction and fit out of a separate living space intended for her long-term use. Everyone treated it as “her” part of the house. Repairs were divided along the same unofficial line: R handled anything to do with the annexe, and H and W handled the rest of the property.
The judge found that this created a common intention that R would have some kind of stake. She had relied on that understanding by taking out a loan, paying it off with rental income, and eventually selling her previous home. In other words, this was not casual generosity. It was money spent with a purpose.
Quantifying the interest
Rather than calculating a strict percentage from expenditure alone, the court took a more realistic approach. It imputed a 12 per cent interest to R, reflecting:
- how much she had invested,
- how the family treated the annexe in practice, and
- the value it added to the property.
Should the family home be sold?
This was the hardest question. R was 88, and the annexe had been adapted for her needs. However, the judge held that there was no other viable way to meet both spouses’ housing requirements. The property had to be sold.
In reaching this decision, the court emphasised that section 24A(6) of the Matrimonial Causes Act 1973 requires judges to consider third-party representations whenever a non-spouse has a beneficial interest. The judgment sets out a helpful six-point checklist for this situation, now confirmed as citable authority.
Ultimately, the home was ordered to be sold, with the proceeds divided as follows:
- 12 per cent to R
- 56 per cent to W
- 32 per cent to H
Why this case matters
A v N reflects a wider pattern. Parents often help adult children financially, then move in, then contribute further to the property. Lines blur quickly. Everyone assumes things will continue smoothly, and no one wants to talk about ownership.
But in law, substantial contributions that create or maintain a living space can turn into beneficial interests. The court will look at what people actually did, not what they might have intended in hindsight.
The case also shows the circular nature of these arrangements. Even though R’s 12 per cent reduced the matrimonial pot, she planned to use it to help W rehouse, meaning the money left the pot at one point and reappeared at another as part of housing resources.
Practical lessons for families and advisers
- Put intentions in writing early
- Even a short note confirming whether money is a gift, loan or investment can prevent expensive disputes years later.
- Annexe arrangements are more than renovations
- If a parent funds a bespoke living space designed for their long-term use, the law may treat it as giving rise to a property interest. Families rarely think of it this way at the time, but the court certainly will.
- Flag possible third-party claims early in proceedings
- If there is any chance a parent has a beneficial interest, it must be identified in Form E and dealt with early. Intervenor proceedings complicate the timetable and the hearing length.
- A sale may be unavoidable even with an elderly parent involved
- Adaptations and personal circumstances matter, but they are not always enough to prevent a sale where there is no other route to fairness.
Final thoughts
A v N reminds us that everyday family arrangements can take on legal consequences over time. What starts as informal support can become something with real legal weight, especially when a parent funds and occupies their own part of a shared home.
Most families do not think about these things when relationships are good, and few want to talk about ownership at the outset. But a short conversation early on can prevent years of uncertainty and avoidable stress later.
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