Published on: 21st March 2022

Joint Tenants v Tenants in Common

In England and Wales, joint ownership occurs when two or more people decide to purchase a property together. The most common scenario is for spouses or unmarried couples to purchase a property together, but joint ownership takes place when a property is purchased by any two people. There are two ways that you can own a property jointly: as Joint Tenants or as Tenants in Common. 

Owning a property as Joint Tenants is the option that most couples initially choose when purchasing a house together. Joint Tenants own the entire property together. This means that when one owner passes away, the entire property is then owned by the survivor regardless of what is in the deceased’s Will. Owning a property as Joint Tenants is a simpler way to own a property jointly.

If you own a property as Tenants in Common, each owner has a certain share of the property. Generally, this will be a 50/50 split, but it can vary depending on circumstances. If one of the owners contributed more to the initial purchase, for example, the ownership could be split into different percentages to reflect this. Even if you own a smaller share of the property, you are still entitled to the full rights of the property. 

One benefit of owning a property as Tenants in Common is that you are able to distribute your share of the property in your Will. For blended families, this can be extraordinarily useful to ensure that children from previous marriages are guaranteed to receive your share in the property when you pass away.~

Additionally, owning a property as Tenants in Common provides you with more opportunities to create testamentary trusts such as a Life Interest Trust which protects your share of the property from being used for care fees as well as protecting it from sideways disinheritance, all whilst guaranteeing your surviving spouse the absolute right to live in the property. Owning your property as Tenants in Common can also help to mitigate Inheritance Tax (IHT) liabilities by gifting a small percentage of your share into a Wealth Protection Trust.

One potential issue with owning a property as Tenants in Common is that both parties need to agree to sell the property. This means that if one of the owners does not have mental capacity, there would be significant complications. One way to mitigate this issue is by creating Lasting Powers of Attorney (LPAs) for Property and Financial Affairs. Having these documents in place for both owners can ensure that if one were to lose capacity, the property could still be managed and sold if needed.

If you would like to discuss the way in which you own your property jointly and the estate planning surrounding your home, please consider booking a no-obligation appointment with one of our knowledgeable consultants by calling 01732 868190 or using our online form by clicking here.

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If you wish to give instructions or require general information about our Wills, Lasting Powers of Attorney, or Trusts then we will carry out a telephone or Zoom appointment. However, if you wish to give instructions to one of our Consultants and you feel that you can only do this at a Face to Face meeting we are offering, at our Consultant’s discretion, a limited number of Face to Face appointments in most of the areas we normally cover (subject to Government advice). To see the areas we normally cover please click here. To arrange an appointment please telephone 01732 868190 or click here.

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