Joint Tenants |
Tenants in Common |
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Also known as beneficial joint tenants
- you have equal rights to the whole property (undivided share in land)
- the property automatically goes to the other owner if one of the joint tenant dies
- you cannot pass on your ownership of the property in your will to anyone other than your surviving partner in the event that you die first (if you yourself are the surviving partner, all the property goes to you and you can then transfer your share of property to anyone in your will)
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A separate share that you can give to anyone
- you can own different beneficial shares of the property (for example 50/50 or 99/1)
- the property doesn't automatically transfer to the other joint owner if you die
- you can transfer your share of property to anyone in your will
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What are the Pros and Cons of Joint Tenants?
Pros |
Cons |
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In the event of death the surviving joint tenant owns the property 100% - if tenants in common the deceased's estate would look to sell the property in order to release the equity due to the estate.
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Simple beneficial ownership - joint tenants own the property 100% so they share income equally 50/50.
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Costs less in legal fees - solicitors charge more for drafting a deed of trust and to register the restriction.
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No need to draft a will - if your home is your only asset and your intention is to leave it to your joint tenant (husband or wife or civil partner) then you may not need to draft a will.
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No need to declare a From 17 - any rental income from property is shared 50/50 and as such there is no need to declare to HMRC.
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Risk in relationship breakdown - joint tenants own the property 100% in one indivisible share so if one party pays more than the other to buy the property this is not recognised and any gain or loss is shared equally.
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Can't use a joint tenancy agreement - you cannot have a deed of trust when buying as joint tenants.
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Harder to force a sale - if you live in the property as joint tenants you will struggle to sell the property without mutual consent forcing you to go to court to seek a court order.
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Who is most likely to buy as joint tenants? |
Married couples. The reason married couples buy as joint tenants is so that on their death the property transfers to their partner. It is also because a married couple's property is viewed to be jointly owned equally unless stated otherwise. HM Revenue and Customs state "If you live together with your spouse or civil partner, we normally treat income from property held in your joint names as if it
belonged to you in equal shares and tax each of you on half of the income, regardless of actual ownership". For more information read the HMRC note on - Form 17 Income Tax declaration of beneficial interest in joint property and income
It is unlikely that an unmarried couple, joint family owners or friends would want to share the property as joint tenants because in each scenario the individuals may have invested unequal shares, they might break up or they might choose to have another partner who may make a claim to the property. Read our article - Splitting up with partner? Are you due money from the property?
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Do you need a deed of trust?
We offer a number of different deed of trusts based on the circumstances of the joint owners. These include:
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Basic Deed of Trust aimed at married couples, long term relationships and family members looking to declare the individual beneficial interest and confirm an exit strategy for when either party wants to sell (click here to find out more).
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Buy to Let Deed of Trust aimed at joint owners looking to share property income in a tax efficient way (to be filed alongside a Form 17 declaration to HMRC)*.
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Silver Deed of Trust aimed at unmarried couples and friends and includes a more complex formula to calculate the beneficial interest over the life of the investment taking into account mortgage repayments, costs of purchase/sale and developments (click here to find out more).
Our solicitor can help you draft a basic deed of trust. For help call 0333 344 3234 (local call charges apply) or click the link below to get a quote.
Get a Deed of Trust Quote
* You should always seek independent tax advice.
