Foxmoth is probably correct, but it's a grey area, and it would be wise to check with the insurance company about it.
Alternately, if he sells you 5% of the aeroplane for a nominal pound with a contract that allows him to buy it back from you at the same price at any time (or you to sell it to him and nobody else at the same price). The financial arrangements within the "syndicate" are then pretty much irrelevant, but you are then declared as part owner to the CAA, which should solve all and any problems.
Ultimately it is the insurer's opinion that matters - but they may wish to see things regularised with CAA. If in doubt, check!
G