What is a Tenancy in Common?
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A tenancy in common is a form of joint ownership of property and land in the UK.
There are two types of joint ownership of houses and land in the UK. Those two types of joint of ownership are called joint tenants and tenants in common. How you own as a joint owner is very important – particularly on death. Here, we explain the tenancy in common.
What is a tenancy in common?
A tenancy in common is the legal principle whereby joint legal owners of land in the UK own distinct separate shares of any one piece of and or property.
Does a tenancy in common have to be equal shares?
Unlike a joint tenancy, tenants in common can hold their shares in whatever proportion they please.
What happens when a tenant in common dies?
You MUST have a will to deal with your share of the property owned as tenants in common. Failing that, the rules of intestacy will apply and the law will decide who gets your share of the property.
Unlike a tenancy in common (being covered here), a joint tenancy will pass automatically by a legal principle called the right or survivorship. This principle does NOT apply to tenants in common – so please MAKE A WILL…!
What is the difference between tenants in common and a tenancy in common?
Tenants in common is the owners themselves, whereas a tenancy in common is the legal principle (not the people).
Is there a limit on the number of tenant in common joint owners?
There is no limit on the number of tenant in common owners.
How do I know I own as a tenant in common?
Confirmation of ownership as tenants in common is held at the Land Registry. Unfortunately, the law being the law it is not simple! There is a section of the Land Registry records called the Proprietorship Register. If you own as tenants in common there is something called a ‘restriction’ in this part of the Registry records. If in doubt – speak to your conveyancing solicitor!
What is a tenant in common restriction?
The tenancy in common restriction is the details held at the Land Registry that confirms you are tenants in common (and NOT joint tenants). It is contained within what is called the Proprietorship Register. If in doubt – speak to your conveyancing solicitor who will confirm what type of joint ownership you hold your property.
Tenancy in common shares can be any proportion.
How do I define my tenancy in common share?
Unlike a joint tenancy (which is automatically equal shares of all owners), a tenancy in common allows you to own shares in unequal amounts. In the absence of evidence to the contrary, then there is still an assumption in law that the joint owners holding as tenants in common will be equal owners (so eg 50/50 if two owners).
If you wish to own in anything other than equal shares, you must execute and appropriate declaration setting out the shares to be held. This is sometimes complicated for example where one party is intending to pay more toward the upkeep, development or maintenance of the property. Our expert conveyancing solicitors can advice you specifically in relation to your own needs on this point.
Can I change from tenant in common to joint tenant?
To change from tenants in common to joint tenants, the tenants in common restriction held on the Land Registry Proprietorship Register must be removed. However grand that sounds (sorry!), it is actually a relatively simple process that one of our conveyancing solicitors can help you with. The significant part of that process is NOT the change itself, but the advice that goes with it. The implications of holding either as tenants in common or joint tenants is enormous – particularly on the death of a joint owner. And so, you should be sure that any changes you make to the joint ownership of land you own is done with care and on an informed basis.
How do I change from joint tenant to tenant in common?
It is a relatively straightforward process for your conveyancing solicitor to change your joint ownership if for any reason you decide you would like to. The process to change from joint tenants to tenants in common is called ‘severing joint tenancy’. This involved placing the tenants in common restriction on the Proprietorship Register at the Land Registry. Speak to one of our conveyancing solicitors for help with this.
What are the benefits of tenancy in common?
The main benefits of owning as tenants in common is that you get to define what shares you own (ie the shares do NOT have to be equal as with a joint tenancy). You can also gift your share on death to someone other than a joint owner, or even into a trust (if that suits your circumstances).
Does a tenancy in common save inheritance tax?
No, a tenancy in common itself does NOT save inheritance tax. However, it does potentially facilitate the opportunity to do so. For example, there are various inheritance tax (IHT) savings schemes which may require you to gift your share of a jointly owned property on death to someone or something (eg a trust) on your death. This can only be done when holding the joint ownership as tenants in common.
So the tenancy in common itself does NOT make any IHT savings, but it may facilitate tax savings planning schemes. Gifting a property (particularly your home) to anyone other than the surviving owner may well be a significant step and you should always approach any scheme with caution, and having taken expert independent legal advice.
Does a tenancy in common avoid care home fees?
The mere ownership as tenants in common does NOT avoid care fees. It does however facilitate the opportunity to explore care fee planning for example with things such a property trusts. This area of the law is often (and perhaps glibly) over simplified when it is fact an area littered with problems and disputes. Gifting your share of a property to anyone whether during your lifetime or on death is a huge step, and one that should not be taken lightly. Please take specialist independent legal advice from a solicitor and or financial planner qualified to advise you on all of the pros and cons of this area.
Got a question about tenant in common?
Whatever your position, if you have a question about tenants in common, or any other related topic that we have not covered here – do please make contact with one of our expert solicitors. You can email us property@qlaw.co.uk, or telephone us on 03300 020 365.
We are thinking of a tenancy in common agreement as my partner would like to buy a share in my house (say 25%)
This would work well for us as we both have children from previous marriages and would mean their inheritance is safe.
if he paid me this money directly would it be taxable? or does it have to be paid off the mortgage?
Thank you for your question – there is actually quite a lot to cover off here! So, to do it properly, you should each get independent advice to protect your separate (and different )interests – od as that sounds at a point at which you are committing to each other in a meaningful way!
Yes, you would need to hold as tenants in common, and you would need some sort of declaration setting out who owns what now, and then moving forward too.
Your mortgage lender is likely to have something to say, and you should contact them to ask what their processes are. They may simply consent to your partner being added to the title and mortgage, or they may even insist on a fresh mortgage application.
Yes, dependent upon the ‘numbers’ Stamp Duty Land Tax (SDLT) may be chargeable.
Lastly, if you want to secure future inheritances (you mentioned children from your respective previous relationships), then you MUST make wills. These are likely to need some form of will trust.
QLAW can potentially help with the above, so do shout if you would like to discuss it further. Meantime, do remember that our legal guides are just that, and they should not be taken as legal advice specific to you. Some further reading that you might find helpful:
Will Trusts
Second marriage and the family home
what is a life interest trust?
Please can you answer a question for me.In 2021 after my husbands death l contacted land registry to remove my husbands name as a proprietor but several years ago we did tenants in common naming my son.l can’t find anything in my will stating this.l do have Restriction shown on register which l do not understand but feel that his name should be on register.l am concerned as he lives in the house with me that should all my funds be used on Nursing home fees he would have to sell.l would b3 grateful if you could clarify that he would own half the property and therefore safe.He is named in my will as sole beneficiary.Many thanks
Hi and thank you for your excellent question.
The assessment of assets is a question of fact, and as such if your son now owns half he owns half! Of course, this should be reflected correctly in the legal title, and if it is not you may wish to put this right sooner than later? This is something QLAW and help with – please contact our property team at property@qlaw.co.uk
Meantime, you might find this article recently posted on our website of interest. It looks (in some depth) at the question of ‘care fee planning’
Thanks again for reaching out with your legal query. Do let us know how you found your QLAW experience Reviews
Hello
I want to buy my first home however as a single party I am unable to borrow as much as a joint tenancy. If I were able to split with my partner 75% (me) and 25% (him) does this mean we can get separate mortgages and I will be able to get a higher LTV ratio?
Thank you
my partner and I paid equal deposit of £7500 which was 7.5% each of house price when we bought house in 1997. I then paid all mortgage payments and paid for a loft extension and double glazing. the other party contributed zero , I paid off the mortgage with an inheritance in 2005. I have applied to change from joint to in common will I have a case to claim a large percentage in court. I have proof all payment came out of my account and other party never worked
Hi,
I have a share in the house I live in which is Tenants in Common. I have almost one third share of the property. If one of the other share holders wishes to sell their one third share, will the whole house have to be sold, i.e. will I have to move out of the property?
many thanks
Andre
Hey Andre, and thanks so much for reaching out to QLAW.
Whilst we cannot advise you specifically on your particular circumstances, this query does come up from time and time and is essentially one of a practical nature. If you (or anyone else) can ‘buy out’ the share wanting to leave then great. If you cannot, then there is no option but to sell.
Hope that helps.