Changing Property Ownership, how we can help… 

There may be many different reasons as to why you may wish to change the way in which you own property with another person(s) or be looking to transfer your property as a whole to someone else. 

Essential, straight-forward legal advice 

Our experienced Solicitors can provide you with the essential advice you need to make the right choices for the future.  Not just on the affect that it will have on the ownership arrangement itself but on other issues that you may not have considered including avoidance of care home fees (see our Care Home Fee advice), inheritance tax planning (see our inheritance tax planning advice) and potential capital gains tax implications. 

We can help you ensure that you are fully advised of all potential implications before you decide to change the way in which you own property giving you holistic advice ensuring that any decision you make now does not adversely affect anything you may wish to do in the future. 

Understanding Property Ownership 

Joint Tenants & Tenants in Common 

When two or more people buy a residential property jointly it is important that they fully understand the choice (which they must make) between the different methods of holding property jointly and the consequences  of that choice.  It is possible  to choose between holding the property either as “Joint Tenants”  or as “Tenants in Common”.  Both are technical legal phrases and have absolutely nothing to do with “tenants”  in the sense of a tenant occupying a property owned by a landlord. 

What are the differences? 

Joint Tenants 

If you hold the property as Joint Tenants 

a) If one of the Joint Tenants dies the share of the deceased passes automatically to the surviving joint tenant(s), This would be the case even if the deceased had made a Will giving all his/her property to someone else. No documentation (and therefore little or no cost) is needed to transfer the share to the survivor on the first death. 

b) The general rule (subject to exceptions such as may arise in divorce proceedings) is the “equity”  in the property (e.the property value less mortgages and sale cost) would belong to you equally in the event of a sale by you both during your lifetimes.  Most married couples and many long term partners hold property in this way as they are entirely content both with equality and the fact that their share of the property goes to their spouse of partner in any event. 

Tenants In Common 

If you hold the property as Tenants In Common 

a) Each person’s share is notionally separate and on death the share passes to the person entitled under your Will or under the intestacy rules (where no Will exists).  It will not pass automatically to the other joint owner(s). Legal documentation will need to be completed to transfer the property share to the person entitled. 

b) Youcan agree to hold your shares in the property other than equally. For example, if A and B buy a property and A contributes 80 per cent and B contributes 20 per cent of the price then they are able (if they wish) to hold the property in those proportions.  In such a case the sale proceeds in due course would also be split 80:20. Also if A and B are to make materially different contributions to payment of a mortgage they may wish their shares in the property to be unequal to reflect the difference 

c) It is possible to transfer your share in the equity (e.your right to the share in the proceeds on sale) to a third party without needing the consent of your co-owner.  You would however need further legal advice if this is an option you wish to explore. 

This option is normally chosen by unrelated persons buying for investment or other cases where it is simply unacceptable for the share of one to pass to the other on death.  It may also be chosen for reasons connected with inheritance tax planning and you should mention this to your advisor when making/amending your Will. 

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