House Ownership

House Ownership and Wills

Tenants in Common

Do you own your house as Tenants in Common?

If not you should probably consider it, for most people in the UK, if they own a house (mortgaged or not) the house is their largest asset and as such, they probably want it protected in their wills if they can. At the very least they want to ensure that it goes to their loved ones!

There are some impending alterations to the value of the family home that can be transferred without any Inheritance Tax (IHT) being payable but these alterations will only effect family homes of high value, well above the national average house value so most people will not be effected by these changes.

The current IHT Nil Rate Band (the amount you can pass to someone else on your death free of IHT) is set at £325,000 for a single person and for married couples (or those in Civil Partnerships) under certain circumstances if they write their wills in a certain way, they can together pass on up to £650,000 (double the single person’s amount) on second death. If you’re unclear on these rules, please call me on 01305 774786 and I can explain further.

There are a number of ways that you can own a property and the main 3 are below:

Sole Ownership

This is if the house is in the sole name of one person, that person can then leave their house to whomever they wish in their will.

Joint Ownership

This is where more than one person own a property on the Land Registry Title, they own it in equal shares and only the last member of the group of owners can leave the property in their will, the previous owners just get struck off the ownership list as they die because the Land Registry work on the rules of Survivorship. Even if the owners who die first mention the property in their wills, it has no bearing and cannot effect the ownership if they own it Jointly.

Tenants in Common

This if where more than one person is on the Land Registry Title and the Title contains a Form A Restriction. This restriction means that the owners own the property as Tenants in Common, it allows the owners to agree on the amount of that property value that each owns, usually, for most couples it’s 50:50 and the Legal Assumption is the same. If they want to own the property in any other percentages then they need to both sign a Declaration of Trust that shows the percentages e.g. 60:40 etc. People who own their properties in this way are afforded the luxury of being able to leave their share of the property to whomever they wish in their wills.

If you currently own your home as Joint Owners and would like to change to Tenants in Common, you can do so on the website linked above, or if you would like to change to Tenants in Common without the other owners permission (unilaterally) then you should contact us directly.

For couples who own their houses as Tenants in Common, you would normally write Trusts into your wills so that on first death, your share of the property is ring-fenced for your children or other preferred beneficiaries rather than leaving it directly to your spouse but you need to give your spouse permission to continue to live in the house until they die. There are many variations of these trusts and to get the right ones in your wills we would need to have a conversation about your personal situations and wishes, again, for this you should call us to discuss in person as families have different needs and requirements.

Single Wills Joint Wills