Joint Tenants or Tenants in Common?  You have committed to buying a house together but you are unsure of how you would like to own the house together. This blog will give you a quick comparison chart to help you make the right decision for you. If you have any questions or would like to discuss an issue with one of our conveyancers, please do not hesitate to contact us on 01243 790532 and we will be very happy to help.

Situation/Question Joint Tenants Tenants in Common
What happens to the Property when I die? The Property will automatically pass to the surviving owner regardless of your Will if it states any differently. Your share in the Property will pass under the terms of your Will. The surviving owner will only keep their share of the Property.
What is the difference between the two? You own the Property together, equally. You do not have any division of the Property or have your own individual share of the Property. This is the preferred way of owning Property for married couples. You have a ‘share’ of the Property along with the other owner. This could be 50/50 or another division however, your share is entirely separate from the other owners. You can therefore transfer your share, sell your share or leave your share in your Will for someone other than the other owner.
I may need to go into a care home in future, what is the best option for me? Due to you owning the whole property jointly, 100% of the property value will be taken into consideration for care home fees. Due to you owning a share of the property, only your share of the property will be taken into consideration for care home fees, for example 50% of the property value. This can have a result of ‘ring-fencing’ the other half of the property value which is not your share as this will not be taken into account.
Are there any tax implications? In relation to Inheritance Tax due to the fact that the property passes automatically to the surviving spouse there will be no Inheritance Tax payable on the property value. In relation to Inheritance Tax, due to the fact that you own a share of the property, your share of the property will be considered as part of your overall estate and the value of your half share will therefore be added to your estate value. If your estate value exceeds the Nil Rate Band’s available to you then there will be tax to pay on the total amount exceeding the Nil Rate Band threshold at a rate of 40%. It is therefore possible that tax will be payable.
Can I change my mind at a later date? It is easy to change your mind at a later date. All you need would need to do is complete a Notice of Severance and serve this on the other owner. You do not need the consent of the co-owner to do this. Once the requisite period of time has lapsed or they have acknowledged receiving the Notice, you can then lodge this with the Land Registry. This will change the ownership to Tenants in Common. There is no fee payable to the Land Registry for doing this. It is not as easy to change your mind at a later date however it is of course still possible. There are various Forms that could be used to do this and you must give a reason as to why you no longer want to hold the property in this way. It can be more time consuming and will need the consent of all of the property owners to change the ownership. There may be a fee payable to the Land Registry for doing this.