GIFT OF THE MAIN RESIDENCE

Whilst the main home may be held jointly by the husband and wife the manner in which it is held can have different consequences.

There are two ways in which freehold or leasehold property can be jointly held in this country

Joint Tenants/Joint Tenancy - this is what is commonly understood by joint ownership. In this case on the death one owner the property automatically passes to the surviving joint owner. Neither party can gift the property to anyone else. In effect each owns the whole. Despite this, half of the property is treated as the deceased's share in valuing the estate for tax purposes.

Tenants in Common/Tenancy in Common - this is a divided form of ownership whereby the parties determine their respective shares. This need not be in equal shares although this is often the case. On the death of an owner his/her share of the property will not pass under the deceased's will to whoever is the beneficiary. It will not pass to the surviving co-owner unless this is specified in the will.

It is often necessary for inheritance tax purposes to change a joint tenancy to a tenancy in common in order to minimise tax on the estate.