The question of joint ownership

Do you know how you hold your property with your co-owners? Rebecca Johnstone, Solicitor at Spire Solicitors LLP, discusses.

rebecca-johnstone-spire-solicitors-norfolkAll legal co-owners are joint tenants, and are separate from the beneficial ownership and in fact the legal owners are not necessarily the same as the beneficial owners. The legal co-owners hold the property on trust for the beneficial owners. The beneficial owners have a ‘beneficial interest,’ aka not an equitable interest, in the property. There are two ways in which the co-owners may hold the beneficial interest:

  1. Joint Tenants
  2. Tenants in Common

The word ‘Tenant’ for this purpose means: ownership.

Joint Tenants:

The co-owners beneficially own the whole of the property each. On death the property passes automatically to the surviving co-owner. If co-owners sell in their lifetimes, the general rule is that they will be entitled to equal shares of the net sale proceeds. Exceptions can be made to the general rule by the Courts in legal proceedings for instance divorce / dissolution of a civil partnership or even on the separation of long term partners.

This ownership may be the most straightforward and convenient. However, it may not be appropriate.

Tenants in Common:

The co-owners have agreed to each own a separate share of the property. This could be equally or it could be in unequal shares.

On death, their share of the property will pass to those who benefit from their estate in accordance with either their Will or intestacy, if they have not made a Will. It is very important that co-owners who hold their property as beneficial Tenants in Common make a Will. If the co-owners sell the property in their lifetime the net sale proceeds will be split as per their shares.

There are numerous circumstances in which this type of ownership should be considered. A few examples:

  • Co-owners have made unequal contributions to the purchase price / deposit.
  • Either co-owner has a child / children from a previous relationship.
  • Inheritance tax planning.

A separate Declaration of Trust document should be prepared to record the amounts that each co-owner has paid towards the purchase price and agree the return on sale or death.

It is possible to sever a Joint Tenancy by serving a notice on your co-owner or the co-owners agreeing to sever.

For more information please contact Rebecca by emailing:  or calling 01953 453143.