Tenants in Common or Joint Tenants

Tenants in Common or Joint Tenants

When more than one person is buying a property we discuss with you at the outset the relationship between you and other owner of the property you are buying and have a full and frank discussion how the property is to be owned by you and the implications of both.   

Should you own the property as Joint Tenants? It is common for a husband and wife to own the property as joint tenants. This means that on the death of the first, the property automatically passes to the survivor irrespective of what your Will says.

There may be reasons why a husband and wife do not wish to hold the property as joint tenants, there may be reasons for Inheritance to hold the property in a different way.  

Increasing numbers of home owners are choosing to hold their property as Tenants in Common. This may cut Inheritance Tax, protect a share of their property and avoid care home fees.  

Tenants in Common each owns a set share. This can either be half each or a defined percentage.

The advantage is that one member of the owners can pass on their share of the property on death, for example, to their children, while the other member of the couple can continue to live there, passing their half on at their death.

Buying as Tenants in Common, if you are buying with a partner and you have both put in unequal deposits, this can protect your share in case of a relationship breakdown. For example, the property could be held as Tenants in Common with a document showing one owner paid in 60% of the deposit and one owner 40% of the deposit and in the event of a breakdown in the relationship and sale then the initial deposits should be returned as such and any increase in value should be paid in the same shares.

It is important to discuss how the property is to be held at the outset of your transaction. 

It is vital that a Will is made upon the purchase of your property when buying as Tenants in Common otherwise the survivor could be at risk and the property may have to be sold.