FTB joint tenants vs tenants in common?

alreeve27

Hi there

I'm after a bit of advice re a joint mortgage between myself and my long term girlfriend. We are both in our 20s and it is our first place together.

As an unmarried couple I am interested to find out a bit more about the implications of signing up as joint tenants vs tenants in common. From what I understand anything in a will is overruled if we go as joint tenants and my half of the property would automatically transfer to her.

I think my parents are concerned about future problems if we split up etc if the property is jointly owned rather than us having equal shares as tenants in common. I have looked into inheritance tax and the property is around £150k so well under the threshold for that. Is there really much difference between us being joint tenants or TIC but putting in our will that we would like it to go to the other person? (as we'll have to do a will anyway for our savings).

Any help would be great thanks

Thrugelmir

The solicitor handling the transaction will be able to draw up a declaration of trust for you. This will specify how the equity in the property will be divided under given circumstances. Also cover the issue of unequal deposit contribution if this is a factor.

Well worth doing. As negates the disputes should your relationship end.

CLAPTON

Some things you may wish to consider.

TIC is useful if you want to divide the owneship into unequal proportions e.g. if one is to own 60% and the other 40%

TIC allows you to leave your share to anyone you like which may have the effect of leaving your partner (or you) homeless

Without a will, parents will own the share if one of you dies.

JT means you both own the property fully.
So if one dies the other person owns the property and can sell before probate is secured.
It is ineffective for IHT purposes if you are not married.


Have you discussed what you want to happen if one of you died?
Have you discussed what you would do if your decide to part?

alreeve27

Thanks for your replies.

I understand what you are saying, but to clarify:

What is the difference between a) us being joint tenants, and b) us being TIC having put in an equal deposit and having a 50% stake in the property, and a will which states our share is going to our partner?

Aside from the probate side of things, are there any other differences i.e. taxes, complications ...

We have decided that we will leave our half to each other as it is fair seeing as we have jointly purchased it with no help from anyone else. We would potentially sell the property if we split up, but haven't talked about this in much detail. Is a declaration of trust something we should complete regardless of which option we go for above? Or only if we are TIC?

Thanks

Thrugelmir

alreeve27 wrote: »

Thanks for your replies.

I understand what you are saying, but to clarify:

What is the difference between a) us being joint tenants, and b) us being TIC having put in an equal deposit and having a 50% stake in the property, and a will which states our share is going to our partner?

Aside from the probate side of things, are there any other differences i.e. taxes, complications ...

We have decided that we will leave our half to each other as it is fair seeing as we have jointly purchased it with no help from anyone else. We would potentially sell the property if we split up, but haven't talked about this in much detail. Is a declaration of trust something we should complete regardless of which option we go for above? Or only if we are TIC?

Thanks

When you appoint a solicitor to handle the transaction. Speak to them then. As they can guide you through what suits your circumstances best. They may well suggest things you haven't considered. Needless to say, its possible to cover any eventuality to the satisfaction of all parties.