Jointly Owned Property After Death – What Happens in the UK?

What Happens to a Jointly Owned Property if One Owner Dies? – UK Guide

In the UK, owning property jointly with another person is common among married couples, partners, and family members. But what happens when one of the joint owners passes away? The answer depends on how the property is owned—whether it's through joint tenancy or tenancy in common—and has implications for inheritance, ownership transfer, and legal processes.

This guide will explain the different types of property ownership, what happens when one owner dies, and what legal steps are required to manage the property after death.

Types of Joint Property Ownership in the UK

When two or more people own property together in the UK, the ownership structure falls into one of two categories:

1. Joint Tenancy

   • Joint tenants own the property equally, and there are no separate shares. This is the most common form of property ownership for married couples and civil partners.
   • Right of Survivorship: In a joint tenancy, when one owner dies, their share of the property automatically passes to the surviving co-owner(s) through the right of survivorship. This process happens immediately and without the need for probate.

2. Tenancy in Common

   • Tenants in common each own a specific share of the property, which can be equal or unequal. This form of ownership is often used by friends, family members, or business partners who buy property together.
   • No Right of Survivorship: When one tenant in common dies, their share of the property does not automatically pass to the surviving co-owner(s). Instead, it is distributed according to the deceased’s will or, if there is no will, under the rules of intestacy. The deceased’s share can be passed on to their heirs or beneficiaries.

Understanding whether the property is owned as joint tenants or tenants in common is crucial in determining what happens to the property after one owner’s death.

What Happens to a Jointly Owned Property When One Owner Dies?

The way the property is handled after death depends on the ownership structure, as explained below:

1. Joint Tenancy and the Right of Survivorship

When a property is owned as joint tenants, the right of survivorship comes into effect automatically upon the death of one owner. This means:

• The deceased’s share of the property is immediately transferred to the surviving co-owner(s) without the need for a will or probate.
• The surviving owner(s) becomes the sole owner(s) of the property.
• The property does not form part of the deceased person’s estate, so it cannot be passed on to anyone else through their will or inherited by their next of kin.

For example, if a married couple owns a home as joint tenants and one spouse passes away, the surviving spouse will automatically inherit the entire property.

2. Tenancy in Common and Inheritance

In the case of tenancy in common, the situation is different because there is no right of survivorship. When one owner dies:

• The deceased’s share of the property becomes part of their estate.
• The share is distributed according to the deceased’s will. If there is a valid will, the deceased’s share will pass to the beneficiaries named in the will.
• If there is no will, the share is distributed according to the rules of intestacy, which dictate how the estate is divided among the deceased’s relatives.

The surviving co-owner(s) will continue to own their share of the property, but they will now share ownership with the deceased’s beneficiaries or heirs.

For example, if two siblings own a property as tenants in common and one sibling dies, the deceased sibling’s share will pass to their heirs (according to the will or intestacy laws). The surviving sibling will now co-own the property with those heirs.

Legal Steps After One Owner Dies

After the death of a joint property owner, certain legal steps must be followed, depending on the ownership structure:

1. For Joint Tenants (Right of Survivorship)

When one joint tenant dies, the surviving owner(s) needs to:

• Inform the Land Registry: The surviving co-owner must notify HM Land Registry of the death by submitting a death certificate and completing the required forms (such as the form DJP) to update the property title.
• No probate required: Because the property automatically passes to the surviving co-owner(s), probate is not required for the transfer of ownership.

2. For Tenants in Common

When one tenant in common dies, the process involves more steps:

• Probate required: The deceased’s share of the property forms part of their estate, so probate is usually required to manage and distribute their share. The executor of the will (or an administrator if there is no will) will need to obtain a Grant of Probate or Letters of Administration to deal with the property.
• Updating the Land Registry: Once probate is granted, the executor or administrator must inform HM Land Registry of the change in ownership and provide the necessary documentation to transfer the deceased’s share to the beneficiaries.
• Sale of the property: In some cases, the surviving co-owner(s) and the deceased’s beneficiaries may choose to sell the property and divide the proceeds according to their ownership shares. This can happen if the beneficiaries do not want to co-own the property with the surviving owner(s).

Inheritance Tax and Jointly Owned Property

Inheritance tax may apply to the deceased’s share of the property, depending on the overall value of the estate and the relationship between the owners.

1. Joint Tenants

   • If the surviving co-owner is the deceased’s spouse or civil partner, no inheritance tax is due on the transferred share, as transfers between spouses or civil partners are exempt.
   • If the surviving co-owner is not a spouse or civil partner (e.g., a friend or sibling), inheritance tax may be due on the deceased’s share if the value of the estate exceeds the inheritance tax threshold (currently £325,000).

2. Tenants in Common

   • The deceased’s share of the property will be included in their estate for inheritance tax purposes. Whether inheritance tax is due depends on the value of the entire estate and any exemptions or reliefs (such as the spouse exemption).

Changing the Type of Ownership

It is possible to change the type of ownership from joint tenancy to tenancy in common (or vice versa) through a legal process called severance. This may be useful for co-owners who want to ensure their share of the property is passed on to their heirs instead of automatically going to the surviving co-owner.

Conclusion

What happens to a jointly owned property when one owner dies in the UK depends on whether the property is held as joint tenants or tenants in common. Joint tenants benefit from the right of survivorship, meaning the property automatically passes to the surviving owner(s), while tenants in common can leave their share of the property to beneficiaries in their will.

Understanding the type of ownership and following the appropriate legal steps is essential for ensuring a smooth transfer of property ownership. If you need help navigating the process, it’s advisable to seek professional advice from a solicitor or estate planning expert.

For more guidance on managing jointly owned property or for assistance with property sales and legal transfers, contact an experienced estate agent or legal advisor.