Changing from Tenants in Common to Joint Tenants

Changing from tenants in common to joint tenants is a common legal step for co-owners whose circumstances have evolved, often following a marriage or a long-term commitment. By merging your individual beneficial shares into a single, undivided interest, you re-establish the Right of Survivorship, ensuring the property passes automatically to the survivor without the need for probate. To finalise this change, you must notify HM Land Registry to cancel the existing Form A Restriction. This guide outlines the administrative requirements, from executing a Deed of Assignment to submitting the correct evidence to the Registrar to update your title.

The process is more complicated than the reverse changing to tenants in common, because you are sacrificing your individual share in the property, which could be more than the other owner, to own the property equally. This is further complicated by the protections the Land Registry has in place for removing the Form A restriction, as they are intended to protect individual shares.

We deep dive into the whole process from drafting a deed of surrender, statement of truth, and the process for removing the Form A restriction to enable you to own the property as joint tenants.

Why Switch to a Joint Tenancy?

The simplicity of joint tenancy is the main draw, and because it is completed mainly by married couples, these are the key benefits for them:

• Ease of Inheritance

  The owners can avoid the grant of probate process for the house if either joint owner dies, regardless of whether the will states otherwise. They can simply update the owners using the Deceased Joint Proprietor Form.

• Legal Ease

  By removing the Form A restriction, owners can remortgage and sell more easily.

• Relationship Change

  As a married couple, you want an equal share in the property as a sign of your status change.

Change to Joint Tenants Today

• For tenants in common who've recently married and want to change to joint tenants.
• Deed of Surrender drafted within 2 working days(1).
• Applications made digitally to the Land Registry within 5 working days(2).
• Fixed Fee of £535 INC VAT or a deed and Update Land Registry.

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Why do you need a deed of surrender?

A Deed of Surrender, in relation to property trusts, is required whenever a person named in a Deed of Trust wishes to formally give up their beneficial interest in a property. It is the legal mechanism used to cancel the previous deed of trust and return the equity to a unified state in accordance with the mandatory joint tenancy Unities Rule.

While a Notice of Severance breaks up the property ownership into tenants in common; a Deed of Surrender is used to stitch it back together or transfer one person's share to another without a full sale.

Common Scenarios for a Deed of Surrender

You will typically need to finalise this document in the following situations:

• 1

  Changing from Tenants in Common to Joint Tenants

  If you currently hold the property in shares (e.g., 60/40) and have a Deed of Trust protecting those shares, you must surrender those individual interests before you can become Joint Tenants. The Deed of Surrender proves to the Land Registry that the specific shares no longer exist and the "Right of Survivorship" can be re-established.

• 2

  One Owner Buying Out Another

  If two people own a property as tenants in common and one person pays the other to leave, a Deed of Surrender is used to confirm that the person leaving has received their money and no longer has any claim to the property's value.

• 3

  Gifts of Equity

  If a parent or partner owns a share of a property through a trust and wishes to gift that share to the other owner, they must surrender their beneficial interest in the trust. This provides a clean paper trail for the Land Registry and future buyers.

• 4

  Removing an 'Old' Trust from the Title

  Sometimes, a Deed of Trust from many years ago remains "active" on the title even though the circumstances have changed (e.g., a debt was repaid). To remove the Form A Restriction from the Register, the Registrar will often require a Deed of Surrender as evidence that the trust has ended.

Is there any tax to pay?

There are 3 taxes that could be triggered when changing from tenants in common to joint tenants: Stamp Duty and Capital Gains; however, most are avoided if the transfer is between a married couple.

Stamp Duty Land Tax (SDLT)

Stamp duty is payable whenever there is a transfer of an interest in land from one person to another. If the existing beneficial ownership is unequal, the owner with a smaller share is acquiring an interest in land, and, as such, stamp duty may be payable.

To work out if any duty is due, you must calculate the consideration. Consideration is any money changing hands or existing debt taken on. For most transfers, the married couple won't be paying for the share, so it is only the existing mortgage debt taken on.

For example, a wife currently owns 30% of the property, and there is a £500,000 mortgage. The married couple changes to joint tenants and doesn't pay any money for the gain, so the consideration is 20% of the existing mortgage taken on. 20% of £500,000 is £100,000, which is below the SDLT threshold for residential property, but if the property is a buy-to-let, stamp duty would be payable.

Capital Gains Tax (CGT)

Capital Gains Tax is payable on the disposal of an interest in a property that isn't your main residence. However, when you are married, there is no CGT on a transfer to your spouse.

When shouldn't you make the change?

Unifying the beneficial ownership shouldn't be something you do without detailed consideration. There are several reasons it may not be the right thing to do.

• Previous Marriage

  If you have children from a previous marriage, you lose the ability to leave your home to them in your will by changing to joint tenancy. If you die, the surviving owner inherits the property with no guarantee or legal mechanism to ensure the deceased's children will benefit.

• Debt Repayment

  If your co-owner gets into financial debt, 100% of the property is used to pay off the debts, rather than just their share. You could lose your home to pay off the debts.

• Care Home Fees

  If your co-owner goes into a care home, then 100% of the property is used to calculate care home fees with the local authority, instead of just their own share.