Today I’m going to talk about tenancy in common. Tenancy in what you might ask? Well, tenants in common is a way of owning property jointly. It may seem strange, but there are two ways to own a property jointly. The first and more common, is called joint beneficial tenants. Joint beneficial tenants means that both owners own all of the property all of the time. So if one of a joint beneficial tenant dies, their share immediately passes to the survivor by what’s called the doctrine of survivorship. It means that there’s no need for administration. But it also means there’s no flexibility in planning.
So for most people, the best way to own a property is a tenancy in common. If you sit with your partner or your spouse, you would probably think that you own the house 50/50 anyway. Tenants in common is the legal way of establishing this. If you’re tenants in common, you’re free to dispose of your 50 percent of the property on your death in the way that you wish to dispose of it. This is especially important if you’re a married because it means you’re free to dispose of it to your partner in a tax efficient way.
It’s especially important if you have what we call a blended family where there are children from more than one relationship, and you want to benefit your children rather than your partner’s children. Twenty percent of homes in the UK are held jointly through tenancy in common. The rest are held jointly as joint beneficial tenancies. Tenancy in common gives you more flexibility, allows for tax planning, and it means that your assets will go to the people you choose your assets to go to. You need to find out more. Get in touch.
