Tenancy
When two or more people share the ownership of a property, there are two ways in which the ‘Joint Ownership’ can be held:
- Joint Tenancy
- Tenancy in Common
Joint Tenancy
With this arrangement, all co-owners effectively own 100% of the property while they are alive and 0% of it if they die leaving a survivor. This means that if two people own a property as Joint Tenants and one of them dies, the survivor automatically becomes the sole 100% owner of the property and the deceased (and the deceased’s estate) owns 0%.
This means that the deceased cannot leave the property in his/her Will – as he/she no longer owns any interest in it.
This is clearly somewhat unsatisfactory in many cases, especially from a tax
vantage or in the case of unmarried owners.
Unfortunately the majority of property ownership in the UK is under Joint Tenancy arrangements. The good news is that it is easy to change!
Tenancy in Common
With this arrangement, each co-owner owns a specific share of the property, with the shares adding up to 100%. This means that if one of the co-owners dies, his/her share of the property becomes part of his/her estate and he/she can dispose of it howsoever he/she pleases.
This is clearly far more satisfactory as it gives each owner the CHOICE – they can still leave their share to the other owner(s), if they choose.
