We are fully open for business- but we still continue to offer remote legal advice to our new and valued clients and third parties. We can work via Facetime, Whatsapp, Skype and Zoom. Please call 0208 232 9560 or complete a contact form to arrange service.

Joint Tenancy. and Tenancy in Common – When and why to sever

 

What is a Deed of Severance?

What is Joint Tenancy?

If one person dies then the joint owner automatically receives the property regardless of what is stated in the will. The ownership falls outside of the will and inheritance tax.

a. Joint tenancy is usually chosen by married couples or those who intend for the property to be held in a way that automatically goes to the other on death.

b. Irrespective of what it says in the will

The will cannot then determine where one parties share will go.

c. Presumption of equal shares in beneficial ownership

Even if there is unequal financial contribution to the purchase price or to the maintenance of the property there will still be a presumption of equality. So be careful how you hold a property if there is to be differing contributions in the future

Tenancy in Common

If one person dies the property passes under the will. If the person does not have a will then it passes under intestacy.

a. Tenancy in common is usually chosen by cohabiting couples or commercial reasons

This is the safest way to hold a property if the owners are not married.

b. You should have a will

Otherwise the property may inadvertently pass to persons you didn’t intend under intestacy.

c. Presumption of unequal beneficial ownership

Even if you do not have an expressed agreement such as a declaration of trust or cohabitation agreement then there is a much stronger chance you can argue that there were unequal contributions and hence that the property should be split in accordance with the agreement or in accordance with the contributions made

Why sever?

On death if you do not wish your share of the property to go to your spouse or partner you would need to sever the joint tenancy into a tenancy in common. You might wish to put in more money into the property. But there may be a strategic reason when not to sever, for example if your partner or spouse is more likely to die first. In such a case you would want to have the property held on a joint tenancy basis so it passes automatically to you.

When to server?

a. Relationship on the rocks, separation, or divorce.

b. Inheritance planning tool: You may wish to give the property under your will so as to avoid your estate bunching up with your spouse’s estate and going over the nil rate band. What you would wish to avoid is to waste the Nil Rate band or not make use of the opportunity to reduce the size of the estate without the opportunity of making lifetime gifts taken into account for tax if you died within 7 years.

How to Sever?

By a notice of severance. This has to be properly served on the other co–owner. Once served there is no going back as it is unilateral and only one party need serve the notice. You should then register the severance with the Land Registry.

 

Get expert legal advice

A solicitor can advise on the options available to you, helping you and your parents achieve a mutually agreeable solution. For more information, contact us at Garner & Hancock Solicitors for a free consultation. Speak to Nigel George or Jakub Kotan

Call us on 020 3870 3676 or fill in the free online enquiry form and we will call you back.

 

Request a free
Consultation

  • Privacy Policy consent

  • Please view our complete Privacy Policy on how we store and protect your data.
  • This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
  • This field is for validation purposes and should be left unchanged.

Our Wealth Protection Solicitors

Mr. Nigel George

Head of Private Client

0208 232 9560

Megan Jones - Paralegal

Ms. Megan Jones

Trainee Solicitor

0208 232 9560

Wealth Protection Articles

Can I make a gift as Deputy (attorney) under an LPA?

Can I make a gift as an attorney? Being a loved-one’s attorney or deputy (“Attorney”) appears to be an onerous task at times. Attorneys usually act on the basis of a Lasting Power of Attorney or under a court order as deputies. Acting in the best interest of the donor is the most important consideration…

Read More...

“No Nups” – Have you secured your assets? – Wealth Protection Service at Garner & Hancock LLP

We at Garner & Hancock have been advising our clients on this form of proactive protective measure for many years.

Read More...
webinar-banner-img

Free advice and Q & A from your armchair - upcoming and recorded webinars

  • Commercial Leases - Getting Out of Them or Renegotiating Them
  • Buying or Selling a Property During This Time – Are You Serious?
  • Landlord and Tenant – Landlords Right During Lockdown

followed by Q&A with our solicitor panel

society-of-trust-and-estate-practitioners-step
Family-Lawyers-100h
resolution-first-for-family-law-100h
sfla-100h2
the-law-society-accredited-conveyancing-quality-logo-100h