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Joint tenants or Tenants in common


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I suppose this one is probably for Plym77, but does anyone know if a BTL should be bought as joint tenants or tenants in common...

I'm buying with my brother and we are going 50/50 all the way.

Are there any tax reasons why I should not buy as joint tenants? The advantage of this is that if ether of us dies, then the other gets the property (which is what we want). However, because - in theory - we both own the whole of the property, is that disadvantageous when filling in a tax return?

Please help!



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Hi Fi

If you are deciding that you will never involve anyone else (for tax planning purposes or otherwise) and that you will always own the property 50:50 then there would not be a problem with joint tenants, however, Tenants in Common provides flexibility in the future.

For example, say in 10 years you decide you want to sell the property and there is a substantial profit to be made. By having as tenants in common you could look at some effective tax planning with your share which would not affect your brothers share. Additionally, you may wish to look at income tax planning if you are married, for example, giving away just 1% of your share of the property to your spouse could mean that income is split 50:50 with your spouse, which can be very handy if one spouse is a higher rate taxpayer and the other basic rate.

Since it does not cost any extra money I would consider doing this as tenants in common to provide flexibility in the future for you. If you own as joint tenants and decide you would rather do tenants in common in the future then this can be done but will probably cost you money to do. You could always amend your will to ensure that your brother is left your share of the property if this is your concern.

Whether the property is owned Tenants in Common or Joint Tenancy does not impact on your tax return, unless unequal shares (TinC).

Hope this helps



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