When someone dies owning property with another person, how that property was held decides whether it forms part of the estate at all. It is one of the first things an executor needs to establish, and getting it wrong affects the probate application, the inheritance tax figures and who ultimately inherits. This guide explains both forms of co-ownership and what each means in practice. It applies to England and Wales; Scotland has a different system of property law and these terms do not carry the same meaning there.
Joint tenancy
Under a joint tenancy, two or more people own the whole property together rather than holding identifiable shares. Each owns all of it, jointly with the others, whatever they each contributed to the purchase.
The defining feature is the right of survivorship. When one joint tenant dies, their interest passes automatically to the survivors by operation of law. It does not pass under the will, and a will cannot override it. If someone owns their home as a joint tenant and leaves “my share of the house” to a child, that gift simply fails.
What this means for probate
Because the property passes automatically, it falls outside the estate for probate purposes. The executor does not need the grant in order for the survivor to take the property, and in a simple case where everything else was jointly held, probate may not be needed at all.
What this means for inheritance tax
Here is the misconception worth correcting, because it is extremely common: joint tenancy does not avoid inheritance tax. The value of the deceased’s share still forms part of their estate for IHT, even though it never passes through the will or the probate process. Avoiding probate and avoiding tax are different things.
For married couples and civil partners the spouse exemption usually means no tax arises on the first death, whatever the ownership structure. For unmarried co-owners there is no such exemption, and IHT may well be due on the deceased’s share.
For 2026/27 the nil-rate band is £325,000. Where a main residence passes to direct descendants, a residence nil-rate band of up to £175,000 may also apply, giving up to £500,000 for a single person, though the residence band tapers away where the estate exceeds £2 million. Both bands are frozen until 5 April 2031. Our guides to the nil-rate band and the residence nil-rate band cover how they interact.
Valuing a co-owned share
A point often missed. A part share in a property is usually worth less than the arithmetic fraction of the whole, because a buyer takes on a co-owner they did not choose. HMRC ordinarily accepts a discount, commonly in the order of 10% to 15%, on a share of jointly owned residential property.
The exception matters: where the other share is held by a spouse or civil partner, the related property rules prevent the discount, and the share is valued as a proportion of the whole. Our guide to valuing an estate for probate deals with this in detail.
Tenancy in common
Under a tenancy in common, each owner holds a distinct share. Shares need not be equal: one person might hold 70% and another 30%, reflecting what each put in. Each owner can sell, mortgage or give away their share independently.
The critical difference is what happens on death. There is no survivorship. The deceased’s share forms part of their estate and passes under their will or, if there is none, under the intestacy rules.
What this means for probate
The share is probate property. The executor must value it, include it in the estate, meet any liabilities attributable to it, and transfer it in accordance with the will. A grant will generally be needed to deal with the legal title.
There is a practical trap here. Where property is held as tenants in common, the Land Register carries a Form A restriction, which prevents a sole surviving owner from giving a valid receipt for the purchase money on a sale. In practice a second trustee must be appointed to join in the sale. A surviving co-owner who assumes they can simply sell will find the transaction stalls at exactly the wrong moment, so this is worth identifying early.
Capital gains tax
Often overlooked. The estate acquires the deceased’s share at its market value at the date of death, so any gain accrued during their lifetime disappears. Gains arising afterwards are taxable.
Whether the personal representatives sell, or transfer the share to a beneficiary who then sells, can make a real difference. Personal representatives have a single annual exempt amount, available only for the tax year of death and the two following years, and pay the higher residential rate. A beneficiary who takes the share first has their own exemption and may pay at the basic rate. Our guide to capital gains tax on inherited property explains the choice.
Why people choose tenancy in common
- Control over who inherits. The share passes under the will, so the owner decides. Joint tenancy removes that choice entirely.
- Second marriages and blended families. The commonest reason. A co-owner can ring-fence their share for children from a previous relationship instead of it passing automatically to their new partner.
- Using a trust in the will. A share can be left on trust, for instance allowing a surviving partner to live in the property for life with the capital passing to children afterwards. That requires a tenancy in common. See what is a will trust and when property is left in a trust in a will.
- Unequal contributions. Where two people put in different amounts, a tenancy in common records that; a joint tenancy does not.
A note on inheritance tax planning
Older guidance often presents severance plus a nil-rate band trust as a standard tax-saving move. That advice is largely out of date. Since the nil-rate band became transferable between spouses and civil partners in 2007, an unused band can be claimed on the second death, so the arrangement is no longer needed simply to preserve it.
Tenancy in common still has real uses, including protecting children’s inheritance and, in some circumstances, the residence nil-rate band and the £2 million taper. But it is no longer the routine tax answer it is sometimes presented as, and severing a joint tenancy purely for tax reasons should not be done without advice.
How to tell which one applies
Check the title at HM Land Registry. A Form A restriction on the proprietorship register indicates a tenancy in common. Its absence points to a joint tenancy. A copy of the register costs a few pounds and is the quickest way to settle the question. The conveyancing file or a declaration of trust from the purchase may also record the position.
Do not rely on what family members believe. This is frequently misremembered, and the answer changes the probate application.
Changing from one to the other
A joint tenancy can be converted to a tenancy in common by severance. Under section 36(2) of the Law of Property Act 1925 this can be done unilaterally, by serving written notice on the other joint tenants; their agreement is not required. Severance produces equal shares, regardless of what each contributed, unless a separate declaration of trust says otherwise.
The severance is then protected by applying to HM Land Registry for a Form A restriction. A solicitor can deal with it quickly and inexpensively, and it is worth doing properly because an unregistered severance can be difficult to prove years later.
Severance operates only for the future. It cannot be done after death to change what has already happened.
What executors should do
Establish the ownership first. Obtain the title register before anything else. Everything downstream depends on the answer.
Value the share. A valuation is needed for the IHT figures and for distribution. Remember the co-ownership discount, and that it does not apply between spouses.
Include jointly held property in the tax figures even when it bypasses probate. The two questions are separate, and this is where executors most often go wrong. See gross and net value of an estate.
Talk to the co-owners early. They may need to co-operate over access, valuation and any sale, and where a beneficiary is living in the property there are further issues to work through.
Deal with the restriction. If a sale is likely, identify the second trustee requirement before the property is marketed.
Our guides to probate property and executors’ responsibilities and transferring property after death cover the practical steps, and inherited property split between siblings deals with the disputes that sometimes follow.
Getting advice
The distinction affects who inherits, how much tax is paid and how straightforward the administration will be. The Probate Network works with SRA-regulated advisors who can advise on co-ownership in the context of probate or estate planning, and you can find a probate legal advisor or request a quote through this site.
Frequently asked questions
Does joint tenancy avoid inheritance tax?
No, and this is the most common misunderstanding about it. Joint tenancy means the property passes outside the will and outside probate, but the value of the deceased’s share is still counted in their estate for inheritance tax. No tax arises where the property passes to a surviving spouse or civil partner, but that is the spouse exemption at work and it applies whatever the ownership structure. Unmarried co-owners get no such relief.
How do I find out how a property is held?
Obtain the title register from HM Land Registry. A Form A restriction on the proprietorship register indicates a tenancy in common; if there is none, it is almost certainly a joint tenancy. A copy costs a few pounds. Do not rely on recollection, as this is often misremembered and it changes how the estate is handled.
What happens to a tenancy-in-common share if there is no will?
It passes under the intestacy rules, which set a fixed order of entitlement that may not reflect what the deceased would have wanted. An unmarried partner inherits nothing under those rules, which is precisely the situation a tenancy in common is often chosen to address, so it is particularly important for tenants in common to make a will.
Can you change from joint tenancy to tenancy in common?
Yes, by severance. Under section 36(2) of the Law of Property Act 1925 one co-owner can do it alone by serving written notice on the others; their consent is not needed. Severance produces equal shares unless a declaration of trust provides otherwise, and it should be protected by registering a Form A restriction at HM Land Registry. It only works during lifetime and cannot be done after a death.
Do executors need probate to deal with a tenancy-in-common share?
Generally yes. The share forms part of the estate, so a grant of probate, or letters of administration where there is no will, is usually needed before it can be transferred or sold. There is also the Form A restriction to deal with: a sole surviving co-owner cannot give a valid receipt for the purchase money on their own, so a second trustee has to be appointed to join in a sale.
Is the deceased’s share valued at a straight percentage of the property?
Usually not. A part share is worth less than the arithmetic fraction because a buyer inherits a co-owner, and HMRC ordinarily accepts a discount of around 10% to 15% on a share of jointly owned residential property. The important exception is where the co-owner is a spouse or civil partner: the related property rules then prevent the discount and the share is valued as a straight proportion.
This article is for general guidance only and applies to England and Wales. It does not constitute legal, tax or financial advice. Rules and thresholds can change and every estate is different. For advice on your own circumstances, speak to a qualified professional. You can book a free legal consultation through The Probate Network.
