Tenants in Common UK (2026): What It Means, How It Works, and Why Your Will Matters

These are the two main ways two or more people can co-own property in England and Wales, and they have fundamentally different legal consequences: (1) JOINT TENANCY: (a) each owner has an equal, undivided share in the WHOLE property — not a specific identifiable fraction; (b) there is a RIGHT OF SURVIVORSHIP (jus accrescendi): when one owner dies, their interest in the property AUTOMATICALLY passes to the surviving owner(s) — regardless of what their will says; (c) the deceased's will has NO EFFECT on the property: it passes outside the estate entirely; (d) all four 'unities' must exist: unity of title, time, interest, and possession; (2) TENANTS IN COMMON: (a) each owner has a DISTINCT, SEPARATE SHARE in the property — identified by fraction or percentage (e.g. 50%, 60%, 70%); (b) there is NO right of survivorship: when one owner dies, their share does NOT automatically pass to the other — it forms part of their estate and passes under their will (or intestacy rules if they have no will); (c) the shares can be EQUAL or UNEQUAL — and do not have to be equal just because the co-owners are partners or a couple; (d) one unity is maintained (possession — all co-owners have equal right to occupy the whole property); (3) THE CRITICAL DIFFERENCE: the key difference is what happens on DEATH. With joint tenancy, the other owner inherits automatically regardless of any will. With tenants in common, the share passes under the will — so the owner must HAVE A WILL to ensure their share goes where they want; (4) HOW TO KNOW WHICH APPLIES: check the Land Registry title for the property. If there is a Form A restriction on the title, the property is held as tenants in common. If there is no restriction and the transfer deed says 'as joint tenants', it is joint tenancy. If the title simply lists two owners with no other indication, it may be joint tenancy — check the original transfer deed or declaration of trust.

Tenants in common is the right structure in several circumstances — and in some situations it is essential for proper estate planning: (1) COUPLES IN A SECOND MARRIAGE OR WITH CHILDREN FROM DIFFERENT RELATIONSHIPS: if you are in a second marriage or civil partnership and each of you has children from a previous relationship, tenants in common is ESSENTIAL so that each partner's share can pass to their own children under their will — rather than the surviving partner automatically inheriting the whole property (as with joint tenancy) and potentially leaving nothing to the first partner's children; (2) UNEQUAL FINANCIAL CONTRIBUTIONS: if the owners contribute different amounts to the purchase price, tenants in common with unequal shares (reflecting the actual contributions) is more appropriate than joint tenancy with automatic equal shares; (3) PROPERTY WILL TRUSTS (LIFE INTEREST TRUSTS): where a couple wants to use a life interest trust will to protect their share of the property for the children while allowing the survivor to continue living there, the property MUST be held as tenants in common first. A joint tenancy overrides the will — the deceased's share never enters the estate. Sever the joint tenancy before the will trust takes effect; (4) BUSINESS PARTNERS: business partners buying property together should almost always hold as tenants in common, reflecting their respective business contributions and ensuring each partner's share can be dealt with separately on death or dissolution; (5) INVESTORS: property investors buying with others (friends, family) should hold as tenants in common with shares proportionate to investment, formalised in a declaration of trust; (6) UNMARRIED COUPLES: unmarried cohabiting couples should consider tenants in common carefully — and MUST have wills, since they have no automatic inheritance rights under intestacy (unlike married couples). Without a will, a tenants in common share passes under intestacy to blood relatives — not the surviving partner.

Tenants in common can be set up at the time of purchase or by severing an existing joint tenancy later: (1) AT PURCHASE: when buying property together, the transfer deed (TR1) includes an option for the buyers to specify how the beneficial ownership is held. Box 10 of the TR1 allows buyers to: (a) state they hold as joint tenants; (b) state they hold as tenants in common in equal shares; (c) state they hold as tenants in common in unequal shares — with the shares specified or in a separate trust deed; (2) DECLARATION OF TRUST (TR1 OR SEPARATE DOCUMENT): if the shares are unequal, or if the arrangement is complex (one party contributing more; third-party funder; conditions), a DECLARATION OF TRUST (or deed of trust) is needed. This is a separate document that specifies: (a) the percentage share of each owner; (b) how the property can be sold (both must consent; or either can apply to court under TOLATA 1996); (c) how costs, mortgage, and improvements are handled; (3) SEVERING AN EXISTING JOINT TENANCY: if the property is currently held as joint tenancy and the owners want to change to tenants in common, this is done by SEVERANCE: (a) written notice of severance signed by the party severing (under LPA 1925 s.196); (b) the notice must be served on the other joint tenant(s); (c) severance is unilateral — no consent is needed from the other joint tenant; (d) effective immediately on service of the notice (Kinch v Bullard [1999] 1 WLR 423); (e) severed to equal shares (50/50 for a couple) unless agreement specifies otherwise; (4) REGISTER THE FORM A RESTRICTION: after severance (or when buying as tenants in common), the Form A restriction should be registered at HMLR. This appears on the title register and alerts any future buyer or mortgagee that the property is held as tenants in common. Form RX1 is used to register the restriction. The Form A restriction ensures overreaching — capital money must be paid to at least two trustees; (5) UPDATE YOUR WILL: once you hold as tenants in common, your share passes under your will (or intestacy). If you do not have a will, or your will does not deal with the property correctly, the share may not go where you intend.

The tax consequences of tenants in common versus joint tenancy are an important consideration: (1) INHERITANCE TAX ON DEATH: when a tenant in common dies, their share of the property forms part of their estate for IHT purposes. The share is valued at the date of death. For a jointly held residential property, the HMRC practice is to allow a 'co-ownership discount' of typically 5-15% on the deceased's share (since a fractional interest is worth less than the equivalent fraction of the whole property value — a buyer of a 50% share cannot immediately occupy and has limited exit options); (2) SPOUSAL/CIVIL PARTNER EXEMPTION: where the property is tenants in common and the deceased's share passes to the surviving spouse or civil partner (under the will or a life interest trust), the spousal exemption under IHTA 1984 s.18 applies — no IHT on the passing of the share on the first death; (3) PROPERTY WILL TRUST AND RNRB: where the tenants in common share passes through a life interest trust under the will, the RNRB (Residence Nil-Rate Band) can apply on the SECOND death if the property (or its net proceeds) eventually passes to direct descendants; (4) CAPITAL GAINS TAX — NO CGT ON SEVERANCE: severing a joint tenancy to become tenants in common does NOT trigger capital gains tax (no disposal; just a change in the nature of ownership). No SDLT or stamp duty arises; (5) CGT ON DISPOSAL: when tenants in common sell the property, CGT arises on the gain attributable to each owner's share separately. Each owner gets their own annual exempt amount (£3,000 per person from 6 April 2024). Private Residence Relief (PPR) applies if the property is each owner's main residence; (6) SDLT: no SDLT arises on severance or on a change in co-ownership shares between existing owners with no consideration paid. SDLT only arises where one co-owner buys out the other's share for value.

This is one of the most important reasons why tenants in common MUST make a will: (1) WITHOUT A WILL — INTESTACY RULES APPLY: if a tenant in common dies without a will (intestate), their share of the property does NOT pass to the other co-owner automatically. Instead, it passes according to the INTESTACY RULES under the Administration of Estates Act 1925 (as amended). The rules determine the order of priority: (a) married/civil partner with children: statutory legacy (£322,000 from 26 July 2023); then half of remainder to spouse; half to children absolutely; (b) married/civil partner without children: whole estate to spouse; (c) no spouse/civil partner: estate to children; parents; siblings; etc.; (2) THE DANGER FOR COHABITING PARTNERS: an unmarried cohabiting partner receives NOTHING under the intestacy rules. They are not in the list of beneficiaries. So if an unmarried tenant in common dies intestate: (a) their share of the jointly owned property does NOT pass to their partner; (b) instead, it passes to the deceased's blood relatives — parents, siblings, children from a previous relationship; (c) the surviving partner may face an application from the deceased's relatives to sell the property under TOLATA 1996 s.14; (d) the surviving partner's only remedy is an Inheritance (Provision for Family and Dependants) Act 1975 claim — which involves court proceedings and uncertainty; (3) WITH A WILL — CONTROL OVER THE SHARE: with a valid will, the tenant in common can direct their share: (a) to the surviving partner absolutely (giving them full ownership); (b) into a life interest trust (allowing the partner to occupy the property while protecting the share for children on the partner's subsequent death); (c) to children or other beneficiaries directly; (4) THE PRACTICAL ADVICE: any co-owner who is a tenant in common — especially an unmarried cohabitant — MUST make a will immediately. The share in the property is one of the most valuable assets in the estate — leaving it to intestacy is a significant risk.