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Whether you own property as joint tenants or tenants in common affects who inherits your share on death — and how IHT is calculated. For married couples, the difference is usually academic (spouse exemption applies either way). For others, the choice can have significant IHT consequences.
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Joint tenancy is the most common form of co-ownership for couples buying a home together. The key feature is the "right of survivorship": when one joint tenant dies, their share automatically passes to the surviving joint tenant(s) — regardless of what the will says. The share does not form part of the estate for probate purposes, but it does form part of the estate for IHT purposes.
In practical terms:
With tenants in common, each owner holds a defined share — which may or may not be equal. On death, each owner's share passes under their will or intestacy, not by survivorship.
This gives much greater flexibility:
For married couples or civil partners, the distinction matters less for IHT on the first death — the spouse exemption means transfers between spouses are IHT-free in either case. The surviving spouse becomes sole owner or takes the deceased's share under the will, and either way the transfer is exempt.
However, the structure does affect the second death:
For most married couples with estates below the £1m combined threshold, joint tenancy and leaving everything to the spouse is simplest and most tax-efficient — making full use of the transferable nil-rate band. For larger estates, tenants in common can open up more planning options.
When property is jointly owned with someone who is not a spouse or civil partner — a sibling, friend, or unmarried partner — the spouse exemption does not apply. This creates important IHT considerations.
There is no IHT exemption for unmarried partners. If an unmarried couple owns a property as joint tenants and one dies, the deceased's share automatically passes to the survivor — but is included in the taxable estate. If the estate exceeds the NRB (£325,000), IHT at 40% is due on the excess.
Unlike married couples, there is no transferable NRB or RNRB for unmarried couples. The survivor may inherit the property but face a significant IHT bill.
If the couple holds as tenants in common, the deceased's share passes under the will. They can leave it to the survivor (no IHT exemption for an unmarried partner, but the gift is in the estate anyway), or to children (potentially using the NRB more efficiently).
HMRC sometimes applies a discount to the value of a share in jointly owned property (particularly tenants in common shares) to reflect that a part share is harder to sell than the whole property. The discount is typically between 10–15% on the value of the share. Whether HMRC accepts a discount depends on the specific circumstances — take advice.
The residence nil-rate band (RNRB) applies where a qualifying residential property passes to direct descendants. For jointly owned property, the RNRB applies to the deceased's share. If the property is jointly owned with the surviving spouse and the first spouse's share passes to the survivor (either by survivorship or under the will), the RNRB is not used — but it transfers to the second estate.
On second death, the RNRB (plus the transferred RNRB from the first death) can apply to the whole property passing to children — giving up to £350,000 of additional threshold for a couple.
It is straightforward to convert from joint tenancy to tenants in common (called "severing the joint tenancy"). This is done by serving a notice of severance — a simple written document — and registering it at HM Land Registry. No consent from the other joint tenant is required.
Converting from tenants in common to joint tenants requires all co-owners to agree. A new transfer deed is needed.
Severing a joint tenancy does not affect CGT or stamp duty — it is a change of ownership type, not a disposal.
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