Have you considered your property ownership style?
Owning a property can come with a host of tax liabilities and legalities that are important to consider.
For example, if you own a property with a partner (meaning you’re knowing as ‘joint owners’) you could be opening yourself up to inheritance tax liabilities if one of you dies and the other inherits their share of the property.
This is something we’d call the ‘old way’ of jointly owning a property.
What are your other options, and why does it matter?
Let’s take a look.
Tenants in common
We’ve already described what joint ownership is above, but what does ‘tenants in common’ mean when it comes to property ownership?
The difference is actually quite simple!
Everything is exactly the same as if you jointly owned, but the primary difference is that instead of the pair of you owning 100% of the property, you would each separately own 50%.
This means that if one of you dies, then the other already owns their 50%, and if the surviving party then inherits the additional 50%, the inheritance tax liability is reduced or could be eliminated.
How easy is it to switch from jointly owned to tenants in common?
The process is actually very easy, so if this is a shift you’re looking to make, we can ensure it’s swift and headache-free!
To make the switch, we’d firstly perform a land registry search to check exactly who owns your property and then we just need a few simple forms completed, which will be lodged with land registry to amend the title register.
If this sounds complicated, don’t worry – we’ll be performing a process known as ‘severance of tenancy’.
Once the forms are generated and you’ve signed them, we’ll pop them over to land registry for processing and your title will be changed accordingly.
How much does it cost to switch to tenants in common?
We charge a nominal fee of just £199 (for a 50/50 split) to implement this switch for you.
If you’re looking for an uneven split, such as 80%/20%, then we’d have to generate a property trust deed, which is £299.
This is great value for money as we’ll be implementing the facility for you, rather than just submitting some forms and lodging with land registry.
I’m not sure whether my property is already set up as tenants in common?
No need to worry!
If you’re not sure whether your property is already set up as tenants in common, we can quickly perform a land registry search for you for a nominal fee, just to cover the costs to land registry, and then you can decide what you want to do next.
What other benefits are there?
Alongside reducing any potential inheritance tax liability, you can also protect any equity by switching your property ownership type to tenants in common.
We know from experience that there are multiple instances in which equity in a property can be sought after by loan companies.
For example, loan companies may attempt to secure a debt against your home, or local authorities may look to seize your home to pay for care costs later in life.
When you transfer your home to tenants in common, any claim on your partner’s share of the property would exclude any equity you now own separately.
If the property was jointly owned, the entire value of any equity would be affected, so this can be highly beneficial!
WE CAN HELP
Apart from reducing any potential Inheritance Tax Liability, by switching the ownership type of your property to Tenants In Common you are also protecting any equity.
We know from experience that there are many instances where equity in a property can be sought after by loan companies attempting to secure a debt against your home, or local authorities looking to seize your home to pay for care costs in later life.
By transferring your home to Tenants in Common, any claim on your partner's share of the property would exclude any equity you now own separately rather than if the property was jointly owned when the entire value of any equity could be affected.
LAND REGISTRY
PROPERTY SEARCH
For just £9.99 we can perform a property search today on your property. Click below to add your information so we can begin the process for you.
TENANTS
IN COMMON
You can activate tenants in common for just £199 to make the most of any potential inheritance tax savings and protect your equity.
GET IN TOUCH TODAY
Give us a call on 0333 240 0851, submit and enquiry below, or pop in & see us, the kettle is always on!
Robert Shaw & Company
181 Church Road, Yardley, Birmingham B25 8UR Tel: 0333 240 0851 (local call rate)
Email: wills@robertshawandco.co.uk
Call us: 0333 240 0851
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