Understanding Joint Ownership of Property, the No-Nonsense Way

When purchasing a property jointly in England or Wales, one of the most important decisions you will face is how you wish to own the property together. At CTT Law, we guide our clients through this process to ensure their ownership structure correctly reflects their intentions and that the conveyancing process is clearly explained from start to finish.

We firstly must explain that there is a difference between legal title and equitable title. Legal title refers to the formal ownership of property recognised by law, granting the holder the right to control and manage the property. This is usually the parties named as ‘proprietors’ on a title register. Equitable title, on the other hand, represents a beneficial interest in the property, and refers to the persons who ultimately enjoy the benefits of a property, which could be (but isn’t always) someone other than the legal owner.

Legal title can only be held solely or jointly. However, in the UK, there are two ways for the equitable title in land and property to be held with another person:

• As joint tenants
• As tenants in common

These terms refer solely to equitable title, not rental arrangements. Understanding the differences is essential for your future planning – especially when considering long-term implications such as what happens on death, divorce, or sale of the property.

Joint Tenants vs. Tenants in Common:  But What’s the Difference?

Each method of co-ownership comes with its own advantages and potential drawbacks that should be carefully considered.

If you choose to hold your property as joint tenants, both owners are considered to own the whole of the property together. That means, there are no distinct, defined shares, which in turn means the following:

• Neither party can leave their share to someone else in a will.
• On the death of one joint tenant, their interest automatically passes to the surviving co-owner—this is called the right of survivorship.
• On sale or separation, it’s presumed that ownership is equal, regardless of financial contribution.

This arrangement is popular among married couples or civil partners who intend their share to pass automatically to the other, without going through probate.

However, it may not be suitable when:

• One person has contributed more financially (e.g. a larger deposit).
• You want to leave your share to someone other than your co-owner, such as children from a previous relationship.
• You’re undertaking estate planning or inheritance tax planning, where a different structure may be beneficial.

As tenants in common, each owner has a clearly defined share of the property. These shares can be equal or unequal and can be passed on to others during life or on death through a will. Contrary to joint tenancy:

• Each owner controls their share and can leave it to anyone in their will.
• Unequal shares are possible and often used when one person contributes more to the purchase price.
• A Declaration of Trust can be used to set out the ownership proportions and terms.

The Role of a Declaration of Trust

A Declaration of Trust – also known as a deed of trust – is a legal document that outlines how the equitable ownership of a property is shared between co-owners. It can set out important arrangements, such as how mortgage payments and household expenses are divided, how the proceeds from a future sale should be distributed, and what should happen if one party decides to sell their share or leave the property.

At CTT Law, we routinely assist clients in drafting clear, robust Declarations of Trust that formalise their ownership arrangements and help prevent future disputes. Depending on your needs, we can include the declaration directly within the property transfer documents or prepare a separate, standalone declaration—particularly where the circumstances are more complex or where greater privacy is preferred.

Please also note that some Declarations of Trust, but not all, now require registration on HMRC’s Trust Registration Service. You should therefore ensure you are satisfied with your obligations in this respect before altering your equitable ownership in a property.

 What If the Property Is Held in Trust?

In some cases, a property may be transferred into a trust structure, for example as part of asset protection or estate planning. In this case, the legal title is generally held by appointed trustees, and the property is managed for the benefit of named beneficiaries.

While we don’t provide financial advice, we work alongside your estate planners or financial advisers to ensure your property title reflects your trust arrangements correctly.

Can The Method of Ownership Be Changed Later?

Yes. Your decision is not permanent, but you must take action to alter it.

• Joint tenants can sever the tenancy and become tenants in common.
• Tenants in common can convert to joint tenants with a new declaration.

However, changing the method of ownership later can involve additional conveyancing work, which may lead to extra costs and, in many cases, can also be a source of stress for the parties involved.

Why This Decision Matters

Failing to document how you want to hold your property can lead to:

• Legal disputes if the relationship breaks down.
• Complications if one party passes away.
• Courts making decisions about ownership shares, possibly contrary to your intentions.

How CTT Law Can Help You Decide

We understand that choosing how to co-own a property isn’t always straightforward. Our role is to:

• Clearly explain the legal and practical implications of each ownership structure in straightforward language, free of legal jargon.
• Assess your circumstances, including financial contributions, wills, family structures, and estate planning goals.
• Prepare the correct documentation, including any Declarations of Trust.
• Work with your other advisors, such as estate planners or mortgage brokers, to align your property ownership with your overall strategy.

Whether you’re a first-time buyer, cohabiting partners, investors, or part of a blended family, we tailor our advice to help you protect your interests and avoid costly mistakes. Therefore, please do not hesitate to get in touch with CTT Law so that we can support you with your co-ownership needs.