How to best own your property

Your home is classed by the Taxman as your ‘main’ property. For many it is where you have brought up your children and it is in every sense your ‘home’.

It is usually the most valuable part of your ‘estate’ as defined by the Taxman for Inheritance Tax calculation upon death.

The Government now rely on over 5 Billion pounds each year as a key source of income. Since the new RNRB Tax laws have come into force (2017) this key source of revenue has jumped up.

As an ‘Estate Planner” it is my responsibility to advise you on how to save paying 40% un necessary Inheritance Tax.

Which we guarantee to do for our clients.

If you own a property jointly with one or more people – then there are two ways that you can register your property; either as ‘joint tenants’ or ‘tenants in common’ TIC. How do the differences between these types of property ownership matter?

In the context of joint tenancy and tenants in common ‘tenancy’ means ownership irrespective of rental income.

Joint Tenancy

Holding a property as joint tenants with another person means that both owners own 100% of the property. You have equal rights to the whole property, and if the property is sold you will each be entitled to equal shares of the proceeds.

A joint tenancy automatically creates a right of survivorship. The result is that when one owner dies the remaining owners will automatically own the whole property (as they’ve always owned 100% of it). A joint tenant cannot gift their interest in the property to anyone in their Will.

Tenancy in Common

If you hold your property as tenants in common you will each have a specified share of the property. This is often an equal share, but it can also mean the property is held in unequal shares. This is a preferable option for people purchasing a property together and contributing different amounts towards the deposit.

Under a tenancy in common each owner can deal with their share of the property separately. You can gift your share to different beneficiaries in your Will. This also opens up more opportunities for planning to protect your share of the property using a Trust in your Will.

What options do I have?

If you do not know how you hold your property we can carry out a check of your title deeds to confirm this for you. If you currently hold as joint tenants and would like to change to tenants in common the process can be relatively straight forward. We completie a ‘notice of severance’ form for the Land Registry and add a notice to your title deeds. We can put a Trust in place if you wish.  Click here fore details.

Leave a Reply