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 email@example.com, or telephone us on 03300 020 365.