What is the difference between tenancy in common and joint tenancy?

Full answer

When two or more people own property in England and Wales, they hold it in one of two ways, and the choice has major consequences for inheritance and tax. Joint tenancy: co-owners hold the whole property together with no separate shares. The defining feature is the right of survivorship - when one owner dies, their interest passes automatically to the surviving owner(s), regardless of any will. This is common for married couples and civil partners who want the home to pass seamlessly to each other. Tenancy in common: each owner holds a distinct share, which can be unequal (for example 70/30 reflecting different deposits). There is no survivorship - on death, an owner's share passes under their will or the intestacy rules. This suits unmarried partners, friends, business partners, or anyone protecting children from a previous relationship. Why it matters for tax and planning. Tenancy in common allows each owner's share to be left to chosen beneficiaries, which can help with inheritance tax planning and protect a share against future care-fee assessments or a survivor's remarriage. For capital gains tax on a second property, declaring unequal beneficial shares (tenants in common) can shift gains toward the lower-rate spouse - CGT is 18% within the basic-rate band and 24% above, with a GBP 3,000 annual exempt amount for 2026/27. You can switch from joint tenancy to tenancy in common by serving a notice of severance and registering a Form A restriction at HM Land Registry; you do not need the other owner's consent. Switching the other way needs agreement. This structure does not change stamp duty land tax, which depends on price and buyer status, not how ownership is held - use a stamp duty calculator for that. For inheritance modelling use an inheritance tax calculator, and consider legal advice when drafting a declaration of trust.

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