There are different ways in which land or other assets can be owned by two or more people in their joint names ('co-ownership'). This includes the matrimonial home where the co-owners are spouses.

Joint Tenants

If co-owners hold property as joint tenants, the property will pass automatically to the survivor in the event of one of them dying. Even if the co-owners have made unequal contributions towards the property, the whole of the property will pass to the survivor. This cannot be prevented by anything contained in the Wills of the co-owners.

Tenants in Common

If co-owners hold property as tenants in common, each of them owns a share of the property. On death, their respective shares will pass under the terms of their Wills, or by the rules of intestacy. The other co-owners will not have any automatic rights to the deceased’s share.

Unless the share is passing to a spouse, Inheritance Tax may be payable on the value of the share which exceeds the amount of the Inheritance Tax nil rate band then in force.

Co-ownership and Inheritance Tax Planning

The way in which property is jointly owned is very significant from both a succession and tax planning perspective. There may be tax planning advantages to a married couple holding their property as tenants in common.

Where trust provisions are included in the spouses' Wills it may then be necessary for a couple to hold the property as tenants in common, both for asset protection and tax planning purposes.

Converting a joint tenancy into a tenancy in common is a fairly straightforward procedure. Adams & Remers have extensive experience in tax and estate planning and can advise you on all aspects of co-ownership and estate planning.

For further advice contact our team direct or talk to your usual contact in the firm.