Tenants in Common vs Joint Tenants and IHT: Severance, NRB Trust Planning, and the RNRB
If your property is held as joint tenants, your will cannot direct your share — it passes automatically to the survivor. Converting to tenants in common (severing the joint tenancy) lets you direct your share through your will — to an NRB trust, to children, or to capture the RNRB on the first death. Most couples should consider severing and updating their wills.
Joint Tenants vs Tenants in Common: IHT Implications
Joint tenants: survivorship overrides the will
When a property is held by joint tenants, each owner has an equal right to the whole property — there are no separate defined shares. On the death of one joint tenant, the property passes automatically to the surviving joint tenant(s) by the right of survivorship — regardless of what the deceased's will says. The will cannot direct what happens to a joint tenancy share: it simply does not form part of the deceased's estate at all (the survivorship rule operates outside of probate). For most married couples who bought their home together, the default ownership is joint tenancy — the property passes to the survivor on the first death. The survivor then owns the property outright and can do with it as they wish (including leaving it to new beneficiaries or a new spouse). The critical IHT consequence: the deceased's share cannot be used to fund an NRB trust or directed to children — it goes directly to the surviving spouse.
Tenants in common: the will controls each share
When a property is held by tenants in common, each owner holds a defined fractional share of the property (commonly 50/50, but can be any proportion). On the death of one co-owner, their share does not pass automatically to the survivor — it passes according to the deceased's will (or intestacy rules if there is no will). The surviving co-owner continues to hold their own share; the deceased's share passes to whoever the will directs. This is essential for: (1) NRB trust planning — the deceased's 50% share can be directed into an NRB discretionary will trust, using the NRB without passing the entire property to the surviving spouse; (2) second marriage — the deceased's share can be directed to children from a first relationship rather than to a new spouse; (3) RNRB planning — the deceased's share can be directed to direct descendants so the RNRB applies on the first death.
How to sever a joint tenancy
A joint tenancy can be severed — converting the ownership to tenants in common — at any time by one co-owner serving a notice of severance on the other co-owner(s). Severance is unilateral: one owner can sever without the other's consent. The notice must be in writing and served on the other joint tenant(s). Once served (whether or not the other party acknowledges it), the joint tenancy is severed and the parties hold as tenants in common in equal shares. The Land Registry title register should be updated: (1) a Form SEV is filed at the Land Registry to enter a restriction on the title (preventing any future sale or mortgage without both owners' consent, signalling that the property is held as tenants in common); and (2) both owners should update or create wills directing their respective shares. Severance can also be effected by a formal agreement or mutual conduct (e.g. agreeing to sell separate shares).
IHT and the RNRB where property is held as joint tenants
The Residence Nil Rate Band (RNRB) allows up to £175,000 of IHT-free value where a qualifying residential property passes to direct descendants. If the property is held as joint tenants and passes by survivorship to the surviving spouse — not to direct descendants — the RNRB does not apply on the first death (the property does not pass to a descendant). The Transferable RNRB (TRNRB) allows the unused RNRB from the first death to be claimed against the second estate, provided the property ultimately passes to direct descendants on the second death. However, if the second spouse remarries and the property passes to the new spouse — not the children — the TRNRB can be lost. Converting to tenants in common and directing the first spouse's share to children (or to a qualifying RNRB trust) on the first death uses the RNRB at the first death, without waiting for the second.
Tenants in common and care fee planning
Where an elderly person is at risk of needing residential care, and their property is held as joint tenants, on the death of one partner the survivor inherits the entire property — which is then assessed in full in any future care fee means-test. Where the property is held as tenants in common, the deceased's share passes under the will. If the deceased's share is directed into a trust (rather than to the surviving spouse directly), the trust share is not in the surviving spouse's estate and may not be assessed in the means-test (depending on the trust structure). This care fee planning argument was once more widely used — local authorities can challenge deliberate deprivation of assets, so specialist advice is essential. However, the structure of tenancy in common ownership gives the option to direct shares through a will rather than being bound by survivorship.
Frequently Asked Questions
Can you sever a joint tenancy without the other owner's agreement?
Yes — severance of a joint tenancy is unilateral. One co-owner can serve a notice of severance on the other and the joint tenancy is severed immediately on service of the notice. The other co-owner's consent is not required. The notice must be in writing and delivered to the other co-owner (not just posted). Once served, both parties hold as tenants in common in equal shares — the distribution changes from survivorship to the respective wills or intestacy. The Land Registry title should be updated with a Form SEV restriction to record that the joint tenancy has been severed and protect each owner's share. If a co-owner dies very shortly after a severance notice is served but before it is received, complex questions of timing may arise — specialist conveyancing advice is recommended.
What happens if there is no will after severing a joint tenancy?
After severing a joint tenancy, each owner's share forms part of their estate on death — passing according to their will or, if there is no will, according to the intestacy rules. Severing a joint tenancy without also making or updating a will can be dangerous: if the surviving spouse is the intestacy beneficiary for the deceased's share (which they typically are under English intestacy for a married couple), the severed share will pass to the survivor anyway — defeating the purpose of the severance for NRB trust or RNRB planning. Severance must always be accompanied by a will directed to make use of the tenants in common structure.
Can a surviving co-owner inherit a tenants in common share and still have the RNRB?
Where a property is held as tenants in common and the deceased's share passes to the surviving spouse (under the will), the RNRB does not apply on the first death — the share has not passed to a direct descendant (it has passed to the spouse, which is exempt from IHT but not RNRB qualifying). The TRNRB from the first death is carried forward and can be claimed on the second death — provided the property (or its equivalent value) passes to descendants. For couples where the surviving spouse may remarry or where the second death is less certain to pass property to direct descendants, it is often better to direct the first spouse's share directly to children (using tenants in common structure and a will), capturing the RNRB on the first death.
What shares do tenants in common hold after severance?
When a joint tenancy is severed (by notice of severance without any other agreement), the parties are treated as holding in equal shares — 50/50 for a two-owner property. If the co-owners wish to hold in different proportions (e.g. reflecting different contributions to the purchase price), they must enter into a formal Declaration of Trust specifying the agreed proportions at the time of purchase or severance. A Declaration of Trust is a document signed by both co-owners specifying the beneficial shares each holds. Without a Declaration of Trust, HMRC and the courts will assume equal shares in most cases (though the actual contributions may be relevant). For IHT purposes, the share in the estate is the beneficial share — as specified in the Declaration of Trust.
Can a mortgage affect the severance or the IHT planning?
A mortgage on a jointly owned property does not prevent severance of the joint tenancy. Severance only affects the beneficial ownership — who is entitled to the equity — not the legal title or the mortgagee's rights. The mortgage lender continues to hold a charge over the whole property regardless of whether the co-owners are joint tenants or tenants in common. For IHT purposes, the deceased's tenants in common share is included in the estate at its market value of the share — which is typically the proportionate value of the equity (market value minus outstanding mortgage, multiplied by the ownership fraction). A minority interest discount may apply where the co-owner is not the whole property owner — though for spouses and family members, the discount is often not applied in practice.
Check Your Property Ownership — and Update Your Will
Severing a joint tenancy without updating your will is planning left half-done. To use your NRB on the first death, direct your property share to an NRB trust, or protect children from a first marriage — you need both: tenants in common ownership AND a will that directs your share. Start with a WillSafe will kit.
View Will Kits from £39.99