Buying with brother: joint tenants or tenants in common?

lb00

Hi all,

I am buying a flat jointly with my brothers. We are cash buyers and our family is gifting us the money for the purchase. 

My brother plans to stay long term here whereas I plan to stay around 6 years in the UK and then might move out to settle down somewhere else in Europe. 

If we buy as joint tenants, when I move out would I be able to gift him my share of the flat if I wanted to?
What costs would this entail? I assume no capital gains tax as until the time of the transfer we were both residing in the property, correct?
Would we need to change from joint tenants to tenants in common before doing this?

Thanks

Bookworm105

No great distinction between JT and TIC in context of eventually changing ownership

JT means each person owns 100% of the property because there is NO SHARE 
If you wish to "give up" the property then you "sever" the joint tenancy and he is left as the sole 100% owner

If you own as TIC then you would have a share. It may, or may not, be 50% depending on what you agree with brother and the family in terms of how their gift is to be split. He re-registers as sole owner. 

You are correct re CGT assuming you and he both live there as your main home for the entire ownership period (or to be technically correct: occupation period + final 9 months ownership in case it takes a few months to sell after you actually move out)

If by "giving" up you mean brother needs to buy you out so you get cash then that has no bearing on whether it is JT or TIC. Likewise if you gift it to him for zero money. However, it would be wise to agree from the outset how much he should pay you as the house may lose or gain value compared to the cash gift your family gave to each of you by making you co-owners. 

p00hsticks

To add to what bookworm105 has said above, the other main consideration is that with a joint tenancy, on the death of one the ownership if the property automatically passes to the other, whereas if a property is owned as tenants in common, then if one owner dies their share is passed on according to what their will says (or the intestacy laws if they die without making a will) 

Albermarle

If we buy as joint tenants, when I move out would I be able to gift him my share of the flat if I wanted to?

That would be very generous of you !

propertyrental

What would you want to happen to the property if you were knocked down and killed by a bus in 3 years time? 

As JTs, brother would automatically (continue to) own 100% of the property.

If you owned as TIC, you could (should!) write a will and specify who was to inherit your interest in the property.

Neither option matters so far as your gifting, or selling, your share in 6 years time. Either way brother simply registers ownership in his sole name (with your signature). If you are selling to him, he passes you the agreed amount (value at date you both took ownership? Value at date of transfer in 6 years time? Agree this in advance!).

Costs depend on whether you DIY this, based on trust (he transfers £, you sign transfer form), or whether you use solicitors.

Provided it's been your main residence for the 6 years, there's no CGT.