What Happens to a Jointly Owned Property If One Owner Dies in the UK?

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

When a property is jointly owned in the UK, what happens after one owner passes away depends on the type of ownership. There are two main forms of joint ownership: joint tenancy and tenants in common. Each structure has different legal consequences, especially concerning inheritance and property rights.

Understanding these rules is crucial for property owners, heirs, and surviving co-owners to navigate inheritance issues smoothly and ensure compliance with UK property laws.

Types of Joint Ownership in the UK

1. Joint Tenancy

Under a joint tenancy, both owners equally own the entire property. When one owner dies, their share automatically passes to the surviving owner through the right of survivorship. This means:

• The property does not become part of the deceased’s estate and cannot be left to someone else in a will.
• The surviving co-owner becomes the sole legal owner.
• No inheritance tax applies on the transferred share unless the estate value exceeds the threshold.

Example:
John and Sarah own a home as joint tenants. When John dies, Sarah automatically becomes the sole owner, regardless of John’s will.

2. Tenants in Common

Under a tenants in common arrangement, each owner holds a specific share of the property (e.g., 50/50 or 70/30). Unlike joint tenancy:

• The deceased’s share does not automatically pass to the surviving owner.
• Instead, it becomes part of their estate and is distributed according to their will or intestacy rules (if no will exists).
• If the share is inherited by someone else, the surviving owner may have to co-own the property with a new party.

Example:
Emma and David own a property as tenants in common (50/50). If David dies and leaves his share to his daughter, Emma and the daughter will co-own the property unless another arrangement is made.

What Happens When One Owner Dies?

1. If the Property Is Owned as Joint Tenants

• The surviving owner automatically inherits full ownership.
• No probate is required to transfer ownership.
• The Land Registry must be updated to remove the deceased owner’s name.
• Inheritance tax is usually not an issue unless the estate exceeds £325,000 (or £500,000 if passing to children).

2. If the Property Is Owned as Tenants in Common

• The deceased’s share passes according to their will or intestacy laws.
• Probate is required before the inheritance is processed.
• The new owner (heir) must be registered on the title with the Land Registry.
• The surviving owner may need to buy out the inherited share or agree on a sale.

What If There Is No Will?

If a tenant in common dies without a will, their share is distributed under UK intestacy laws, meaning:

• If married, the spouse usually inherits most or all of the share.
• If unmarried, children inherit in equal shares.
• If no spouse or children exist, the share may go to parents, siblings, or other relatives.

Can a Joint Tenancy Be Changed to Tenants in Common?

Yes, property owners can sever a joint tenancy and convert it into tenants in common, allowing them to leave their share to heirs. This is done through a Notice of Severance filed with the Land Registry.

Can the Surviving Owner Be Forced to Sell?

In tenants in common situations, the person inheriting the deceased’s share may:

• Agree to co-own the property with the surviving owner.
• Sell their share to the surviving owner.
• Request a sale of the whole property if an agreement cannot be reached.
• The surviving owner may apply to the court to prevent or delay a forced sale.

How to Protect Joint Ownership Interests

• Ensure the correct ownership structure (joint tenants or tenants in common) suits your estate planning needs.
• Make a will to clarify property inheritance and prevent disputes.
• Consider life insurance to cover the cost of buying out the deceased’s share.
• Use a trust to control how property is passed to heirs.

Conclusion

The fate of a jointly owned property after one owner’s death depends on whether it is held as joint tenants (survivor inherits automatically) or tenants in common (share passes through the deceased’s estate). Understanding these legal distinctions is crucial for estate planning and avoiding disputes.

If you need guidance on joint property ownership, Fraser Bond can help. Our experts provide legal and real estate advice tailored to your situation, ensuring that your property rights are protected.

Contact Fraser Bond today to discuss your property ownership and inheritance options.