Joint Tenancy VS Tenancy In Common

mane1034

I am buying a one bedroom flat for the investment purposes. Initial plan is to live there for couple of years and then put this property on rent and then buy another flat/house fore residential purposes.

I will be paying the mortgage cost of the flat as my wife does not work. Also I am on high income tax band.

I wanted to include my wife's name in the property to split the cost of income tax etc in case we put this flat on rent in the future.

Keeping in view of inheritance tax or income tax implications. I am not sure which of the following options should we go:

Joint Tenancy
Tenancy in Common

margaretclare

Just be sure what you want and then decide. Your wife's name should certainly be in there somehow. Even if she's not paying the mortgage, she's going to be living there, isn't she?

1. Joint tenancy - this is what DH and I have. Whichever one of us dies first, the tenancy passes 100% to the survivor. No complications.

2. Tenants-in-common. It's half-and-half. The half owned by whoever dies first can be left to someone else. To me, that sounds too complicated, but others may come along and point out the advantages of it.

I have no knowledge of the tax implications. Good luck whatever you decide.

Yorkie1

Generally, the same names have to be on the deeds as on the mortgage.

Tenants in common can be any split of ownership, doesn't have to be 50/50.

If you receive income from the property once let out, you are subject to tax on it - and I think the income is split according to ownership proportions, so it might be worth considering this to minimise tax. Another way of reducing tax is to switch to an interest only BTL mortgage when you let it out (assuming the figures will add up), as I think the interest element can be set against tax.

If tax planning is your main aim, don't rely on my comments but take professional advice on your particular circumstances.