Tenants in Common vs Joint Tenants: Which Should You Choose When Buying Together?

The Core Difference: Survivorship

The single most important practical difference is what happens when one owner dies.

---

When to Choose Joint Tenancy

Joint tenancy works best when:

• You're married or in a civil partnership and want the property to pass automatically to your spouse on death (survivorship also avoids Probate for the property)
• Your combined estate is below the IHT thresholds (£325,000 NRB + £175,000 RNRB for a surviving spouse = £500,000 per person, £1m for a couple)
• You want simplicity: no Declaration of Trust, no need to specify shares, automatic inheritance without a will required
• You have equal financial contributions and equal shares reflect your intentions

Caveat: joint tenancy and remarriage

If one joint tenant dies and the surviving owner later remarries, the new spouse may inherit the entire property — even if the original intent was for children from the first relationship to receive a share. Joint tenancy eliminates this protection. Tenants in common allows a share to be ring-fenced for children via a will or trust.

---

When to Choose Tenants in Common

Tenants in common is generally preferable when:

• Contributions are unequal: different deposit amounts, different mortgage payments, inheritance used for purchase
• You are unmarried and want to protect your specific investment if the relationship ends
• IHT planning is relevant (larger estates, children from previous relationships)
• You want to protect your share in the event of the other owner's bankruptcy or creditor claims
• One owner is buying to invest, not to live in

Unequal shares: the Declaration of Trust

When tenants in common hold unequal shares, they should have a Declaration of Trust (also called a Deed of Trust) drawn up by a solicitor. This document specifies:

• The percentage owned by each party
• What happens on sale (proceeds split per shares)
• What happens if one party wants to sell and the other doesn't
• Provisions for changes in circumstances (new contributions, renovations)

A Declaration of Trust costs approximately £300–£500 to prepare. Without one, proving your percentage ownership in a dispute is much harder.

---

Practical Examples

Example 1: Married couple, similar incomes, combined estate ~£500k

Recommendation: joint tenancy

Simple survivorship means the surviving spouse inherits seamlessly. IHT is unlikely to be an issue given the combined threshold. No Declaration of Trust needed.

Example 2: Unmarried couple, £400k property, different deposits (A: £60k, B: £20k)

Recommendation: tenants in common, 70/30 split, Declaration of Trust

A's larger deposit should be protected. If they split up, the 70/30 reflects economic contributions. A Declaration of Trust also specifies what happens with ongoing mortgage payments, who gets what on sale, and exit routes.

Example 3: Siblings buying an investment property together

Recommendation: tenants in common, 50/50, Declaration of Trust

Each sibling wants to be able to leave their share to their own family, not to each other. The Declaration of Trust should cover the crucial question: what happens if one sibling wants to sell but the other doesn't?

Example 4: Couple with large estate (combined £1.5m property) and children from previous relationships

Recommendation: tenants in common, with life interest trust in wills

On first death, the deceased's share passes into a life interest trust — the survivor can remain in the property but cannot dispose of the deceased's share. On the survivor's death, the trust unwinds and children inherit. This protects both the survivor's right to live in the home and the children's eventual inheritance. Also maximises use of the RNRB on both deaths.

---

Tax Implications

Stamp Duty (SDLT / LBTT / LTT)

The form of co-ownership doesn't affect SDLT on purchase. However, the shares affect calculations in specific scenarios:

• If tenants in common hold unequal shares and one is not their main residence (e.g., existing homeowner buying an investment share), the 3% SDLT surcharge may apply to their share
• If a married couple are tenants in common and one transfers their share to the other (e.g., on divorce), this is generally exempt from SDLT provided it's part of a court order

Capital Gains Tax

Each tenant in common is taxed on their proportionate share of the gain when the property is sold. For couples, HMRC Form 17 can be used to assert an unequal beneficial interest in rental income (useful if one partner pays higher rate tax).

Inheritance Tax

• Joint tenants: property passes to survivor and forms part of the survivor's estate on their death — potentially triggering IHT at 40% above NRB+RNRB
• Tenants in common: deceased's share is separate — can be left to children (using NRB on first death) or into trust (preserving RNRB on second death)

For estates above £500k total, the IHT implications of ownership structure are worth reviewing with a solicitor.

---

How to Register Your Chosen Arrangement

At completion, your conveyancer will register the appropriate form at Land Registry:

• Joint tenancy: no restriction required — presumption of joint tenancy applies
• Tenants in common: a Form A restriction is placed on the register, alerting any future buyer that co-owners hold as tenants in common (meaning both signatures are required to sell)

If you're buying as tenants in common, tell your solicitor explicitly — they'll ensure the Form A restriction is registered and prepare the Declaration of Trust.