Property Purchase in Joint Names – What You Should Know
Where a property is owned by two or more people, under English and Welsh Law the co-owners must hold it by one of two methods, namely as beneficial joint tenants or as tenants in common. Both methods have very different implications on the death of one of the co-owners.
As tenants in common, co-owners of property can specify in what shares the property is owned between them, for example a wife might own 70% of the property while the husband owns 30% depending on what each may have contributed to the purchase price of the property. On the death of one co-owner, their share will pass under their will or according to the laws of intestacy – it does not automatically pass to the other owner(s). This is often a popular choice where a co-owner has children by a previous marriage.
As joint tenants, co-owners of property together own an equal and undivided share in the property, regardless of their contributions. On the death of one co-owner, their entitlement passes automatically to the surviving co-owners. This might be a sensible choice for an unmarried couple where they would wish the surviving partner to remain in the property. The share does not form part of the deceased’s estate for administrative purposes, although it does for the purpose of Inheritance Tax. Please note that Inheritance Tax is not payable on dispositions between husband, wife or civil partner.
For informed and comprehensive advice on how to hold your joint property, or indeed on any aspects of buying or selling a property, please contact our Conveyancing Team on 01267 237441.