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Joint Tenants vs Tenants in Common

If you are in a marriage or stable relationship, then buying as Joint Tenants is probably fine.  With this method, you own the property jointly, you split income and costs equally and, on the death of one owner, the other owner automatically inherits the deceased person’s share of the property.  This is the most common way married couples own their family home. 

If you are in a relationship that has yet to be shown to be stable or long-term, then buying a property as Tenants In Common might be better.  This way you each own an individual share of the property, which you can theoretically sell to a third party without the agreement of the other owner (although any mortgage lender may have to be satisfied).  Also, if one of you dies, your Estate inherits your share of the property – not the other owner.

For buy-to-let properties, buying as Tenants In Common will generally allow couples to buy/own the property in the most tax efficient proportion – directing rental income to the lower earning person.  However, any later change to the ownership proportion, could create a sale for Capital Gains Tax purposes.  For married couples this is not a concern, but for unmarried couples this should not be done lightly.    

If couples buy a property as Joint Tenants – and subsequently wish they owned it as Tenants In Common - a solicitor can fix this by drafting a simple Declaration of Trust, which defines the ownership proportions.  A form 17 has to be submitted to HMRC as part of this process.