When buying a property, most people do not understand the difference between being joint tenants or tenants in common.

If you buy a property as joint tenants, this means that when you die, your share of the property automatically goes to the surviving tenants. This takes precedence over your will.

Due to the high property prices today, many people buy properties with their partners, siblings or even friends. Very often the deposit is funded by their parents. They purchase properties as joint tenants and do not realise that their share will automatically go to the surviving tenants.

There have been cases when a son or daughter has unexpectedly died, and their share of the property goes to their friends despite the fact that the parents have now lost a child and their deposit.

In the honeymoon phase of a relationship especially with the excitement of buying a new house, most people do not even contemplate that the relationship may end in the future. Very often, I give inheritance tax advice and find that the deceased individual has left the share in the property to the person they now despise the most (the surviving ex-spouse) instead of the children.

As a result, I recommend purchasing a property as ‘tenants in common’. This means that your share of the property is yours and you can leave it to whomever you wish to. If it is left to a spouse, it will be covered by the interspousal exemption and is usually tax free for inheritance tax purposes in any case.

However, it may be beneficial to leave the share of the property directly to the children to claim the residence nil rate band of £175,000.

Think carefully about whether you want to buy the property as joint tenants or tenants in common. As a general rule, it is more prudent to purchase it as ‘tenants in common’ Hope your preparation for the December 2021 exams is going well. Tax is technical. If you need my condensed notes which makes it simple to learn the technical rules