Joint Ownership

Reception-Door-2Joint Tenancy and Tenancy In Common

These are two different types of Co-Ownership. A Joint Tenancy means that the Co-Owners have equal undivided shares in the property which pass automatically on the death of one Joint Tenant to the surviving Joint Tenant(s). A Joint Tenancy can not be passed under a person’s Will. This may have particularly important implications for Co-Owners who are not married.

A Tenancy In-Common is a holding of a divided share. Such a share can pass on a Tenant In-Common’s death under his Will or under his Intestacy (without a Will). Unlike a Joint Tenancy, the shares in a Tenancy In-Common do not have to be equal.

Should We Have a Joint Tenancy or a Tenancy-In-Common?

There are three levels of consideration here:

Firstly, if the shares of the Co-Owners are unequal, they must have a Tenancy-In-Common. We advise that this should be evidenced by a Declaration of Trust.

Secondly, if the shares of the Co-Owners are equal, then a Tenancy-In-Common will still be desirable if any of the Co-Owners do not want their share to pass to the other Co-Owners on their death. Remember that a share in a Joint Tenancy can not pass under a person’s Will on their death if there are one or more surviving joint tenants.

Thirdly, even if the shares are equal and the Co-Owners are happy that their share will pass to the other Co-Owner on their death, a Tenancy-In-Common may be desirable for the purpose of Capital Transfer /Inheritance Tax planning. There are differences in Capital Taxes between Northern Ireland and the Republic of Ireland. Such Tax planning should be considered in conjunction with having Wills drawn up. Discussion of this topic is outside the scope of this website but at Morgan McManus we will be happy to explain this to our clients in more detail.