A joint method of property ownership, used when you buy or inherit a property jointly with someone. Usually done when you don’t have a close relationship with the other party.
The tenants in common each own a different share of the property, the property can be passed on to people in your will, ensuring the whole property doesn’t go to the other party if you pass away.
Tenants in common vs joint tenants:
Inheritance tax is collected from a persons estate when they die, if the estate is <£325,000 then there is a nil rate allowance. If the estate is greater in value, the standard 40% is charged. If the owners estate doesn’t have enough money to pay inheritance tax, the tenants in common are expected to pay. Property shares of the first owner can be passed down, so no tax will be due, but when the next owner dies, their half may be below threshold, so children won’t pay inheritance tax.
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