Joint Tenants vs Tenants in Common: Pros and Cons
21/04/2021
7 min read
The choice of joint tenants or tenants in common is far more important than it might seem at first glance. In fact, this decision effects your rights over rental income and your shares of the sale profits, if or when you sell the property.
If you need to change from joint tenants to tenants in common, we can help:
What is the difference between joint tenants and tenants in common?
While tenants in common generally provides more freedom and security, there are some disadvantages of tenants in common, compare your options in the table below.
Joint Tenants (also known as beneficial joint tenants) | Tenants in Common |
|
|
So, is tenants in common a good idea?
When comparing joint tenants vs tenants in common, you will need to consider whether you share everything equally or unequally. If you want to share everything equally (ownership, income, tax responsibility, expenses etc) then joint tenancy might be fine.
If you would like to share things unequally; if you want to ensure that if you break up, you can make a relatively clean and painless exit; if you want to leave your share to other beneficiaries after your death; or, if you want to protect your share of the value in your home from being swallowed up by your partners care home fees in later life, then registering as tenants in common is a good idea.
Joint tenancy vs tenants in common: Pros and Cons
Joint Tenants | Tenants in Common | |
What happens when you die? |
|
|
|
| |
This can be problematic where one party wants to leave some of their share in the property to their children from a previous marriage. In this case you would need to execute a severance of joint tenancy. | This can cause a dispute between your partner and the beneficiaries of your will. To avoid this, you may consider adding a clause to your will which gives your partner the right to live in your property until their death (should they survive you) before the beneficiaries of your will can claim their inheritance of your share in the property. If you are married, you will also need either a post nuptial agreement from your spouse, otherwise they could fight your kids to keep the whole property. | |
What happens if you break up? |
|
|
|
| |
This might be a good idea where you have children together. You can still get half each even if one party has made more of a financial investment and the other has been a full time parent. It also means that one party cannot force the other party to sell the family home, which may provide more stability for the children. | This option offers more protection to couples who want to avoid a messy break-up | |
Is this an investment property? |
|
|
|
| |
Parachute Law Ltd does not provide stamp duty, bankruptcy, financial, tax (including capital gains tax, inheritance tax or rental income tax) advice and does not advise you as to the suitability of any tenancy arrangement for your particular circumstances. We can introduce you to a professional accountant if you would like tax and financial advice specific to your situation and assets. |
How do I change from Joint Tenants to Tenants in Common?
You will need:
- To sever joint tenancy
- To register as tenants in common
- To put a deed of trust in place
- To draft a will
- To file HMRC form 17 for any unequal beneficial interest split
- And, if leaving your share of the property to another beneficiary, to sign a post-nuptial agreement.
And, if married:
If you are buying or registering as tenants in common you are advised to get a deed of trust
Here are three types of deeds for different circumstances.
- Basic Deed of Trust - For long term couples or family members looking to declare their beneficial interest shares and confirm their exit strategy if a party wants to sell.
- Buy to Let Deed of Trust - For joint owners who wish to share property ownership and income unequally, in a tax efficient way.
- Floating Deed of Trust - For unmarried couples and friends who want their individual investments toward mortage repayments, works and developments to be reflected in their share of beneficial ownership.
We have on hand counsel to support your deed and offer guidance along the way. Get in contact to become tenants in common, or to get a deed of trust.
Qualified Solicitors | Competitive Quotes | Straight Talking Legal Support
Frequently Asked Questions
Find Out More:
Talk to a Professional
If you're looking to change your status between joint tenants vs tenants in common, we can help.