Property ownership
You’ve probably never chosen how you own your house. The answer has direct consequences for inheritance tax, care fees, divorce, and where the property ends up.
Most couples in England and Wales own their home as joint tenants, and almost none of them chose it. It was on the form the conveyancer used, and nobody explained that there was a decision to make.
It matters. How you own your home affects your inheritance tax position, what happens on a second marriage, whether a share can be preserved for your children, and how the property is treated in a care assessment.
The concepts on this page are England and Wales. Scotland differs materially.
The two ways to own
Joint tenants
You both own the whole. On the first death the property passes automatically to the survivor by survivorship — outside the will, whatever the will says. Simple, and it gives you no ability to direct where a share goes.
Tenants in common
You each own a defined share, commonly half each but it can be any split. Your share passes under your will, which means it can be left to your children, or into a trust, rather than automatically to your co-owner.
Severance of tenancy
The process of changing from the first to the second. It is a straightforward step, registered at the Land Registry, and it is often the single most effective thing available to a couple — but only if the wills behind it are drafted to match.
A declaration of trust
Where the shares aren’t equal, or where someone contributed more, a declaration of trust records the split so it isn’t argued about later.
Where it matters most
Second marriages
As joint tenants, the house passes to your new spouse absolutely. Their will then decides where it goes, and it may not be to your children. This is the most common way children of a first marriage are unintentionally disinherited.
Inheritance tax
How the property is held governs which allowances can be used and when, and whether the residence nil-rate band is available.
Protecting a share for children
Only possible if there is a share to protect, which means tenants in common.
Care fees — honestly
A share held in trust after a death is treated differently from a property owned outright, and that can matter. But transferring your home during your lifetime to avoid care fees is a different thing entirely: local authorities can look back, treat it as deliberate deprivation, assess you as though you still owned it, and pursue the person you gave it to. We won’t tell you the house can simply be protected, because it can’t.
Where to start
Find out how you actually own it. It is on your title register, and if you don’t know, that is not unusual — most people don’t. The Clarity Report asks the question, and if the answer is the one that doesn’t suit your situation, changing it is among the more straightforward things on this list.
Does this apply to you?
Eleven questions, about five minutes, and a report written for your situation setting out which of the Six Steps actually apply to you. Checked by a person before it reaches you. No cost, and no obligation.
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