{"id":10794,"date":"2021-04-30T11:12:07","date_gmt":"2021-04-30T10:12:07","guid":{"rendered":"https:\/\/taxfix.com\/en-uk\/?p=10794"},"modified":"2026-10-29T09:56:21","modified_gmt":"2026-10-29T09:56:21","slug":"joint-tenants-vs-tenants-in-common","status":"publish","type":"post","link":"https:\/\/taxfix.com\/en-uk\/landlord-tax-returns\/joint-tenants-vs-tenants-in-common\/","title":{"rendered":"Joint tenants vs tenants in common &#8211; what does it mean for tax?"},"content":{"rendered":"\n<p>If you own a rental property with someone else, the way you structure that ownership can save or cost you thousands of pounds in tax every year. Joint tenants and tenants in common are the two main options, and each has different implications for <a href=\"https:\/\/taxfix.com\/en-uk\/glossary\/income-tax\/\">income tax<\/a>, <a href=\"https:\/\/taxfix.com\/en-uk\/glossary\/capital-gains-tax-cgt\/\">capital gains tax<\/a>, and <a href=\"https:\/\/taxfix.com\/en-uk\/glossary\/inheritance-tax-iht\/\">inheritance tax<\/a>. This guide explains which structure suits your situation, when to switch, and how to do it.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Key Takeaways<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Joint tenants:<\/strong> equal ownership, property passes automatically on death, simple but inflexible for tax planning<\/li>\n\n\n\n<li><strong>Tenants in common: <\/strong>unequal shares allowed, you can leave your share in your will, and it&#8217;s usually the better option for tax efficiency<\/li>\n\n\n\n<li><strong>Tax impact: <\/strong>tenants in common can save up to \u00a32,500 a year if one partner pays a lower rate of income tax<\/li>\n\n\n\n<li><strong>Action point:<\/strong> if you&#8217;re married or in a civil partnership and one of you earns significantly less, switching to tenants in common and filing Form 17 could cut your tax bill<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<div class=\"embed-container\"><iframe loading=\"lazy\" title=\"Tax in 10(ish) seconds - what&#039;s a landlord?\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/DooX5wdaBqw?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/div>\n<\/div><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">What\u2019s the difference between joint tenants vs tenants in common?<\/h2>\n\n\n\n<p>Both joint tenants and tenants in common offer different advantages and drawbacks to property buyers. Unsure which type of joint ownership suits you? It depends on your individual circumstances and needs. We\u2019ve outlined the differences between the two below.<\/p>\n\n\n\n<p>Remember that the type of ownership you pick will affect what you can do with the property. This is if either one of you dies or if your relationship breaks down.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Joint tenants<\/h3>\n\n\n\n<p>In a joint tenancy, both owners hold the entire property together. It doesn&#8217;t matter if one person contributed more to the purchase: you each own the whole thing equally.<\/p>\n\n\n\n<p>If one owner dies, the property automatically passes to the surviving owner. This is known as the <strong>right of survivorship<\/strong>, which means joint tenants cannot leave their share to anyone else in their will.<\/p>\n\n\n\n<p>Joint tenancy is popular with couples in committed relationships and close family members, as it keeps things simple and can reduce legal costs.<\/p>\n\n\n\n<p><strong>For tax purposes<\/strong>, HMRC treats joint tenants as splitting all <a href=\"https:\/\/taxfix.com\/en-uk\/calculator\/rental-income-tax\/\">rental income<\/a> and <a href=\"https:\/\/taxfix.com\/en-uk\/landlord-tax-returns\/capital-gains-tax-on-property\/\">capital gains<\/a> <strong>50\/50<\/strong>, regardless of who paid what towards the purchase.<\/p>\n\n\n<\/div> <!-- .c-body -->\n\n<div class=\"b-highlight-mini m-nude m-align-left\">\n    <div class=\"b-block-body\">\n        <h2>What happens if your relationship breaks down?<\/h2>\n<p>During a divorce, the distribution of your assets &#8211; including the property &#8211; is treated differently. However, if you hold the property as joint tenants, this would still be split into equal amounts, regardless of if one buyer contributed more towards the initial purchase.<\/p>\n\n    <\/div>\n<\/div> <!-- .b-highlight-mini -->\n\n<div class=\"c-body\">\n\n\n\n\n<h3 class=\"wp-block-heading\">Tenants in common<\/h3>\n\n\n\n<p>Tenants in common each own a separate, defined share of the property. Those shares don&#8217;t have to be equal: you might own 80% while your co-owner holds 20%.<\/p>\n\n\n\n<p>Key things to know:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Each owner holds their own <strong>distinct share<\/strong><\/li>\n\n\n\n<li>The property does not automatically pass to the other owner when you die<\/li>\n\n\n\n<li>You can leave your share to whoever you choose in your will<\/li>\n<\/ul>\n\n\n\n<p>This structure is a sensible choice for<strong> investment properties<\/strong>, or when buying with someone you&#8217;re not in a close personal relationship with.<\/p>\n\n\n\n<p>Tenants in common allows you to split rental income and capital gains in line with your actual ownership shares, which can be more tax-efficient if one owner pays a lower rate of tax.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Deed of Trust<\/h3>\n\n\n\n<p>If you own a property as<strong> tenants in common<\/strong>, it&#8217;s strongly recommended that you draw up a Deed of Trust (sometimes called a Declaration of Trust). It sets out each owner&#8217;s financial share and what happens if the property is sold or one owner wants to buy the other out.<\/p>\n\n\n\n<p>A Deed of Trust also provides evidence to HMRC if you want to split rental income other than 50\/50.<\/p>\n\n\n\n<p>While not a legal requirement, having one in place can prevent disputes and save significant time and cost later.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Changing your type of ownership<\/h3>\n\n\n\n<p>Changing from joint tenants to tenants in common is called a \u2018<a href=\"https:\/\/www.gov.uk\/joint-property-ownership\/change-from-joint-tenants-to-tenants-in-common\">severance of joint tenancy<\/a>\u2019 and you need to apply for a <a href=\"https:\/\/www.gov.uk\/government\/publications\/form-a-restriction-application-to-enter-sev\">Form A restriction<\/a>. You don\u2019t need the other owners\u2019 permission.&nbsp;If you want to <a href=\"https:\/\/www.gov.uk\/joint-property-ownership\/change-from-tenants-in-common-to-joint-tenants\">change from tenants in common to joint tenants<\/a>, you need the agreement of all the other joint owners.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">When does joint ownership structure matter for tax?<\/h2>\n\n\n\n<p>The ownership structure you choose affects three types of tax: income tax, capital gains tax, and inheritance tax. Here&#8217;s when it really makes a difference.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">If you&#8217;re married or in a civil partnership<\/h3>\n\n\n\n<p><strong>HMRC&#8217;s default rule<\/strong> is that married couples and civil partners split rental income 50\/50, even if one person contributed more to the purchase or owns a larger share.<\/p>\n\n\n\n<p>If you&#8217;re tenants in common, you can elect to split income according to your actual ownership shares instead. You do this by filing <a href=\"https:\/\/www.gov.uk\/government\/publications\/income-tax-declaration-of-beneficial-interests-in-joint-property-and-income-17\">Form 17<\/a> with HMRC. This can make a real difference if one of you pays income tax at a lower rate.<\/p>\n\n\n\n<p><strong>For example<\/strong>, if one partner earns<strong> \u00a330,000 <\/strong>and the other earns <strong>\u00a370,000<\/strong>, shifting more rental income to the lower earner could save <strong>over \u00a31,000<\/strong> a year.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">If you&#8217;re not married<\/h3>\n\n\n\n<p>If you&#8217;re not married, HMRC taxes each owner on their<strong> actual ownership share<\/strong>. The catch is that<strong> joint tenants<\/strong> are still assumed to own 50\/50, even if one person put in significantly more money.<\/p>\n\n\n\n<p><strong>Tenants in common<\/strong> avoids this problem. Your shares are set out clearly from the start, so each person pays tax on what they actually own.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">If one of you doesn&#8217;t work or earns very little<\/h3>\n\n\n\n<p>If one co-owner has little or no income, there&#8217;s a real opportunity to reduce your tax bill. Shifting rental income to the lower earner makes use of their personal allowance and lower tax bands, which can <strong>save 20\u201340%<\/strong> on the income that&#8217;s moved across.<\/p>\n\n\n\n<p>This is one of the most effective reasons to own as <strong>tenants in common<\/strong>, particularly if one partner is not working, retired, or on a significantly lower salary.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How joint ownership affects your income tax<\/h2>\n\n\n\n<p>The way you own a property directly affects how much <a href=\"https:\/\/taxfix.com\/en-uk\/landlord-tax-returns\/rental-income-tax-joint-ownership-property\/\">rental income<\/a> each of you pays tax on, and how much of that tax you can reduce.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">The default rule: joint tenants<\/h3>\n\n\n\n<p>Under joint tenancy, HMRC splits rental income <strong>50\/50<\/strong>. Each person reports half the rent and half the <a href=\"https:\/\/taxfix.com\/en-uk\/expenses\/allowable-property-expenses-for-rental-income\/\">allowable expenses<\/a> on their <a href=\"https:\/\/taxfix.com\/en-uk\/glossary\/self-assessment\/\">Self Assessment tax return<\/a>, regardless of who manages the property or contributed more to the purchase.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">The income-splitting election: tenants in common and Form 17<\/h3>\n\n\n\n<p>If you&#8217;re married or in a civil partnership and own the property as tenants in common, you can file Form 17 with HMRC to split rental income in line with your actual ownership shares, rather than the default 50\/50.<\/p>\n\n\n\n<p>A rental property generates \u00a315,000 net income per year. Owner A is a <a href=\"https:\/\/taxfix.com\/en-uk\/glossary\/higher-rate-tax\/\">higher-rate taxpayer<\/a> (40%). Owner B is a <a href=\"https:\/\/taxfix.com\/en-uk\/glossary\/basic-tax-rate\/\">basic-rate taxpayer<\/a> (20%).&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Ownership split<\/strong>&nbsp;<\/td><td><strong>Owner A <\/strong>(higher-rate)<\/td><td><strong>Owner B <\/strong>(basic-rate)<\/td><td><strong>Total tax<\/strong><\/td><\/tr><tr><td><strong>Default 50\/50 split&nbsp;<\/strong><\/td><td>\u00a37,500 \u2192 pays \u00a33,000&nbsp;<\/td><td>\u00a37,500 \u2192 pays \u00a31,500&nbsp;<\/td><td><strong>\u00a34,500&nbsp;<\/strong><\/td><\/tr><tr><td><strong>90\/10 tenants in common + Form 17&nbsp;<\/strong><\/td><td>\u00a31,500 \u2192 pays \u00a3600&nbsp;<\/td><td>\u00a313,500 \u2192 pays \u00a32,700&nbsp;<\/td><td><strong>\u00a33,300&nbsp;<\/strong><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><strong>Annual saving: \u00a31,200\u00a0<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">When to use it<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>One partner is a basic-rate taxpayer, the other is higher\/additional<\/li>\n\n\n\n<li>One partner has unused <a href=\"https:\/\/taxfix.com\/en-uk\/glossary\/personal-allowance\/\">personal allowance<\/a><\/li>\n\n\n\n<li>One partner is retired or on parental leave<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">How to do it<\/h3>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Change to tenants in common (severance of joint tenancy via Form A restriction)<\/li>\n\n\n\n<li>Draw up a Deed of Trust to document the ownership shares<\/li>\n\n\n\n<li>Complete Form 17 and send it to HMRC \u2014 both owners must sign it<\/li>\n\n\n\n<li>The election takes effect from the date HMRC receives the form<\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading\">Inheritance tax<\/h2>\n\n\n\n<p>Your ownership structure determines who inherits your share and how much tax they pay.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">How joint tenants and tenants in common differ for IHT<\/h3>\n\n\n\n<p>IHT is a tax on your estate when you die. If your estate exceeds the tax-free threshold, the excess is taxed at 40%.<\/p>\n\n\n\n<p>If your share passes to your spouse or civil partner, no IHT is due either way. If it passes to anyone else, the structure matters.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Joint tenants:<\/strong> half the property value is added to your estate, which could push it over the threshold.<\/li>\n\n\n\n<li><strong>Tenants in common:<\/strong> only your defined share is added to your estate, making it more likely to stay under the threshold, and your beneficiary may have no tax to pay.<\/li>\n<\/ul>\n\n\n<\/div> <!-- .c-body -->\n\n<div class=\"b-highlight-mini m-nude m-align-left\">\n    <div class=\"b-block-body\">\n        <p><b>Note: <\/b><span style=\"font-weight: 400;\">For IHT purposes, property is valued at its open market value on the date of death. It&#8217;s worth getting a professional valuation from a <\/span><a href=\"https:\/\/www.ricsfirms.com\/\"><span style=\"font-weight: 400;\">RICS-accredited surveyor<\/span><\/a><span style=\"font-weight: 400;\">, as HMRC may challenge figures they consider too low. <\/span><\/p>\n\n    <\/div>\n<\/div> <!-- .b-highlight-mini -->\n\n<div class=\"c-body\">\n\n\n\n\n<h3 class=\"wp-block-heading\">The nil-rate bands<\/h3>\n\n\n\n<p>IHT is charged at 40% on the value of your estate above these thresholds:&nbsp;<\/p>\n\n\n<\/div> <!-- .c-body -->\n\n<div class=\"b-highlight-mini m-neutral m-align-left\">\n    <div class=\"b-block-body\">\n        <p><b>Inheritance tax (IHT)<\/b><span style=\"font-weight: 400;\"> rates in the 2025\/26 tax year \ud83d\udc47<\/span><\/p>\n<table>\n<tbody>\n<tr>\n<td><b>Inheritance type<\/b><\/td>\n<td><b>Tax-free threshold<\/b><\/td>\n<td><b>Rate payable after threshold<\/b><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Standard<\/span><\/td>\n<td><span style=\"font-weight: 400;\">\u00a3325,000<\/span><\/td>\n<td><span style=\"font-weight: 400;\">40%<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Children, grandchildren<\/span><\/td>\n<td><span style=\"font-weight: 400;\">\u00a3500,000<\/span><\/td>\n<td><span style=\"font-weight: 400;\">40%<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Spouse, civil partner, charity<\/span><\/td>\n<td><span style=\"font-weight: 400;\">No limit<\/span><\/td>\n<td><span style=\"font-weight: 400;\">0%<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Charity donation<\/span><\/td>\n<td><span style=\"font-weight: 400;\">10% or more of estate value\u00a0<\/span><\/td>\n<td><span style=\"font-weight: 400;\">36%<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Small gifts<\/span><\/td>\n<td><span style=\"font-weight: 400;\">\u00a33,000 per tax year<\/span><\/td>\n<td><span style=\"font-weight: 400;\">40%<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Agricultural property<\/span><\/td>\n<td><span style=\"font-weight: 400;\">\u00a31m*<\/span><\/td>\n<td><span style=\"font-weight: 400;\">20%<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span style=\"font-weight: 400;\">*there\u2019s also a 50% tax relief for farmers with land worth more than \u00a31m. <\/span><a href=\"https:\/\/www.gov.uk\/government\/news\/what-are-the-changes-to-agricultural-property-relief\"><span style=\"font-weight: 400;\">Check out HMRC<\/span><\/a><span style=\"font-weight: 400;\"> for more on this.\u00a0<\/span><\/p>\n\n    <\/div>\n<\/div> <!-- .b-highlight-mini -->\n\n<div class=\"c-body\">\n\n\n\n\n\n<h3 class=\"wp-block-heading\">Planning point<\/h3>\n\n\n\n<p>Tenants in common gives you more control over IHT planning. You can leave your share to your children or grandchildren and claim the residence nil-rate band (RNRB) of <strong>\u00a3175,000<\/strong> \u2013 on top of the standard <strong>\u00a3325,000 <\/strong>nil-rate band. That&#8217;s a total tax-free threshold of <strong>\u00a3500,000<\/strong> per person.<\/p>\n\n\n\n<p>Bear in mind the <strong>RNRB<\/strong> must be claimed by your executors when they file your <strong>IHT return<\/strong>. It is not applied automatically.<\/p>\n\n\n\n<p>Joint tenancy locks you into automatic transfer on death, which removes that flexibility and may mean your allowances go to waste.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Capital gains tax<\/h2>\n\n\n\n<p>When you sell a jointly owned property, the way you split the gain can make a significant difference to your tax bill.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">How CGT applies to joint owners<\/h3>\n\n\n\n<p>When you sell a jointly owned property at a <a href=\"https:\/\/taxfix.com\/en-uk\/glossary\/profit\/\">profit<\/a>, each owner is taxed on their share of the gain:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Joint tenants:<\/strong> HMRC assumes a 50\/50 split<\/li>\n\n\n\n<li><strong>Tenants in common:<\/strong> The gain is split according to actual ownership shares<\/li>\n<\/ul>\n\n\n\n<p><strong>Capital gains tax<\/strong> rates in the 2025\/26 tax year. It\u2019s paid on profits over the \u00a33,000 CGT allowance <\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Type of asset<\/strong><\/td><td><strong>Basic rate<\/strong><\/td><td><strong>Higher rate<\/strong><\/td><\/tr><tr><td>Shares<\/td><td>18%<\/td><td>24%<\/td><\/tr><tr><td>Residential property<\/td><td>18%<\/td><td>24%<\/td><\/tr><tr><td>Bitcoin\/cryptocurrency<\/td><td>18%<\/td><td>24%<\/td><\/tr><tr><td>Other<\/td><td>18%<\/td><td>24%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\">Why this matters<\/h3>\n\n\n\n<p>Each owner gets their own <strong>\u00a33,000 CGT allowance<\/strong>. If one owner is a basic-rate taxpayer (18% CGT) and the other pays the higher rate (24% CGT), shifting more of the gain to the lower-rate owner saves<strong> 6% <\/strong>on every pound moved across, which adds up quickly on a large gain.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Example<\/h3>\n\n\n\n<p>A property is bought for \u00a3200,000 and sold for \u00a3260,000 \u2013 a gain of \u00a360,000. After both owners use their \u00a33,000 CGT allowance (\u00a36,000 total), the taxable gain is <strong>\u00a354,000<\/strong>.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Ownership split<\/strong><\/td><td><strong>Owner A<\/strong><\/td><td><strong>Owner B<\/strong><\/td><td><strong>Total CGT<\/strong><\/td><\/tr><tr><td><strong>Joint tenants (50\/50) \u2014 both higher-rate<\/strong><\/td><td><strong>\u00a327,000 \u00d7 24% = \u00a36,480&nbsp;<\/strong><\/td><td><strong>\u00a327,000 \u00d7 24% = \u00a36,480<\/strong><\/td><td><strong>\u00a312,960<\/strong><\/td><\/tr><tr><td><strong>Tenants in common (90\/10) \u2014 one basic-rate<\/strong><\/td><td><strong>\u00a327,000 \u00d7 24% = \u00a36,480<\/strong><\/td><td><strong>\u00a327,000 \u00d7 18% = \u00a34,860<\/strong><\/td><td><strong>\u00a311,340<\/strong><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><strong>Saving: \u00a31,620<\/strong>\u00a0<\/p>\n\n\n\n<p>You can estimate your own CGT liability using our<a href=\"https:\/\/taxfix.com\/en-uk\/calculator\/uk-capital-gains-tax-rates-calculator\/\"> CGT calculator<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Should you switch from joint tenants to tenants in common?<\/h2>\n\n\n\n<p>Switching ownership structure is a straightforward process, but it&#8217;s worth knowing when it makes financial sense before you act.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>When it makes sense<\/strong><\/h3>\n\n\n\n<p>Switching is worth considering if:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>You&#8217;re married or in a civil partnership and one of you pays a lower rate of income tax.<\/li>\n\n\n\n<li>You want to leave your share of the property to someone other than the co-owner.<\/li>\n\n\n\n<li>You contributed unequal amounts to the purchase and want that reflected in the ownership structure.<\/li>\n\n\n\n<li>You&#8217;re planning ahead for IHT and want to make use of both nil-rate bands.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>When it doesn&#8217;t<\/strong><\/h3>\n\n\n\n<p>Switching may not be necessary if:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>You&#8217;re not married and are already taxed on your actual ownership shares<\/li>\n\n\n\n<li>Both of you are in the same income tax bracket<\/li>\n\n\n\n<li>You want the simplicity of automatic transfer on death<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>How to switch<\/strong><\/h3>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Apply for a <strong>Form A restriction<\/strong> (severance of joint tenancy) at HM Land Registry \u2013 you don&#8217;t need the other owner&#8217;s permission<\/li>\n\n\n\n<li>Draw up a <strong>Deed of Trust<\/strong> to document the new ownership shares<\/li>\n\n\n\n<li>If you&#8217;re married or in a civil partnership and want to split rental income, file <strong>Form 17<\/strong> with HMRC<\/li>\n<\/ol>\n\n\n\n<p>The process typically costs between <strong>\u00a3100 <\/strong>and<strong> \u00a3300<\/strong> in legal fees.&nbsp;<\/p>\n\n\n\n<p><strong>Need help with your landlord tax return?<\/strong> If you&#8217;re unsure how to report rental income, split ownership, or claim mortgage interest relief, Taxfix can help. Our accredited accountants handle everything for you.&nbsp;<\/p>\n\n\n\n<p><a href=\"https:\/\/taxfix.com\/en-uk\/landlords-2\/\"><strong>Find out more about our landlord tax return service \u2192<\/strong><\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">FAQ: Joint tenants vs tenants in common<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">What does tenants in common mean?<\/h3>\n\n\n\n<p>Tenants in common is a form of joint property ownership where each person holds a defined share. Unlike joint tenancy, shares don&#8217;t have to be equal, and each owner can leave their share to whoever they choose in their will.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What are the tax benefits of tenants in common?<\/h3>\n\n\n\n<p>The main tax benefit is flexibility. The tenants in common tax implications for rental income mean you&#8217;re taxed on your actual ownership share rather than a default 50\/50 split. If one owner pays a lower rate of income tax, this can reduce the overall tax bill by hundreds or even thousands of pounds a year. For married couples or civil partners, Form 17 makes this election official.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Do joint tenants pay more tax?<\/h3>\n\n\n\n<p>Not necessarily, but they can. The joint tenants tax implications stem from HMRC&#8217;s assumption of a 50\/50 income split. If one owner pays a higher rate of tax, more rental income is taxed at that higher rate than it needs to be. Tenants in common with an unequal split can avoid this.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Can I change from joint tenants to tenants in common?<\/h3>\n\n\n\n<p>Yes. You apply for a Form A restriction at HM Land Registry. You don&#8217;t need the other owner&#8217;s agreement to do this. It&#8217;s a relatively straightforward process, though it&#8217;s worth taking legal advice to make sure the ownership shares are documented correctly.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What is Form 17 and do I need it?<\/h3>\n\n\n\n<p>Form 17 is an election you send to HMRC to declare that you want rental income split according to actual ownership shares rather than 50\/50. It&#8217;s only available to married couples and civil partners who own property as tenants in common. You&#8217;ll need a Deed of Trust as supporting evidence.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Does tenants in common affect capital gains tax?<\/h3>\n\n\n\n<p>Yes. When you sell the property, each owner pays CGT on their share of the gain. If one owner is a basic-rate taxpayer, their CGT rate on residential property is 18% rather than 24% \u2013 so holding a larger share in the lower-rate owner&#8217;s name can reduce the overall CGT bill.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What happens to the property if one joint tenant dies?<\/h3>\n\n\n\n<p>Under joint tenancy, the property automatically passes to the surviving owner. This is known as the right of survivorship, which means the deceased owner cannot leave their share in a will. If the surviving owner is not a spouse or civil partner, the value of the deceased&#8217;s share may be added to their estate and could trigger an IHT liability.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Can unmarried couples use Form 17?<\/h3>\n\n\n\n<p>No. Form 17 is only available to married couples and civil partners. Unmarried couples who own property as tenants in common are automatically taxed on their actual ownership shares, so no election is needed.&nbsp;<\/p>\n\n\n\n<p><em>This article provides general information only and is not personalised tax advice.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you own a rental property with someone else, the way you structure that ownership can save or cost you thousands of pounds in tax every year. Joint tenants and tenants in common are the two main options, and each has different implications for income tax, capital gains tax, and inheritance tax. This guide explains [&hellip;]<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[455,452],"tags":[70,423,421],"class_list":["post-10794","post","type-post","status-publish","format-standard","hentry","category-co-owning-property","category-landlord-tax-returns","tag-capital-gains-tax","tag-gifts-inheritance","tag-property"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Joint tenants vs tenants in common - what does it mean for tax? &#8211; Taxfix<\/title>\n<meta name=\"description\" content=\"Which is right for you? 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