HMRC Jointly Owned Property and the Types of Ownership

  • September 23, 2023
  • December 15, 2023
  • Shaz Nawaz
  • 12 min read

If you decide to buy a property with another person or people, then you should do so carefully. It is important to understand the implications of jointly owning a property. It is a complex matter. You need to know the type of ownership you are getting into and your rights as a joint owner. This guide covers everything you need to know about an HMRC jointly owned property.

First, let’s discuss the types of ownership. Then, we can move on to mortgages and tax implications.

HMRC Jointly Owned Property

What is Joint Tenancy in the UK?

A type of ownership where each person owns the entirety of the property is called a joint tenancy. This means that everyone has a full (100%) stake in the value of the property.

If you own a property in joint tenancy, then legally you must act as a single owner rather than separately. So, you proceed by getting one joint mortgage that covers the amount you are borrowing to purchase the property.

You must all agree if you decide to sell the property. Furthermore, you cannot transfer a portion of the jointly owned property to someone else through your will. Suppose one of you passes away, then the other person will get the property automatically. It passes on to them via ‘right of survivorship’. If you are married, then both you and your spouse own the property together as joint tenants.

What is Tenancy in Common in the UK?

When it comes to tenancy in common, each person owns a separate share of the property. This means that the shares are not necessarily of equal size. An example as such is that you own 50% of the property and two of your children own 25% each.

In Scotland, tenants in common are called joint owners. Usually, relatives or friends who are buying the property together use this kind of joint ownership. Much like joint tenancy, it is necessary that you all agree if you decide to sell the property.

The difference is that tenants in common have the right to transfer their part of the property to any they like through their will.

Theoretically speaking, you can get a separate mortgage for your part of the property. However, very few lenders are going to agree to separate mortgages. Therefore, you will need to get a joint mortgage even if you are tenants in common. It is important to the rules regarding HMRC jointly owned property.

What are the Differences Between Tenancy in Common and Joint Tenancy?

There are advantages and disadvantages to both types of joint ownership. It depends on the relationship you have with your buyer and your personal situation.

Tenants in CommonJoint Tenants
Division of ownershipEach of you owns a share of the property. Sizes of shares can vary.Both of you own the entire property
Can you leave your share of the property in your will to anyone?Yes, you can.No, you cannot. It will transfer to the other owners automatically.
Does everyone need to agree to sell the property?Yes, everyone must agree.Yes, everyone must agree.
Tenancy in Common vs Joint Tenancy

What is a Deed of Trust?

A deed of trust, also called a ‘declaration of trust’, is a legal document. This document states the amount of money each joint owner contributed towards the property deposit. Moreover, it includes what should happen to their money if the following occurs:

  • One of you cannot pay their share of the mortgage.
  • Your relationship ends.
  • You decide to sell your property.

It is a useful document as it provides protection to your financial contributions when you purchase property with other people. Now, you know which legal document you require for an HMRC jointly owned property.

What are Joint Mortgages?

In a situation where you purchase a property with other people or even another person, you require a joint mortgage. Mostly, joint mortgages are for two people. However, some lenders do allow a maximum of four people to share a mortgage.

Suppose there are more than two people sharing a mortgage. Then, the lender will usually consider only two of the highest incomes when evaluating how much you can borrow.

Advantages of a Joint Mortgage

Getting a joint mortgage has its own benefits. For example, the lender will look at the combined incomes of you both when they evaluate how much you can borrow. This means that you can borrow more money this way.

Furthermore, you can combine your savings to place a larger deposit. As a result, you can save money because you can get a mortgage at a lower interest rate. You now know the benefits of a joint mortgage for an HMRC jointly owned property.

Disadvantage of a Joint Mortgage

A joint mortgage comes with its share of drawbacks. You must trust the person or people you are getting the joint mortgage with. This is because you have equal responsibility to make the repayments. In case someone does not repay their share, then you must cover for them.

Moreover, when you get a joint mortgage, you create a financial connection between yourself and the co-owners of the property. In a scenario where one of them has financial issues, this may affect everyone’s credit rating as well. Thus, you will have trouble borrowing later. Unfortunately, there are disadvantages of a joint mortgage for an HMRC jointly owned property.

What Rights Do You Have Under Joint Ownership?

As a joint owner, you have the legal ownership of the property. Your rights as an owner of jointly owned property include:

  • No one can sell the property unless you agree or go through a court order.
  • Without a court order, no one can force you to leave.
  • Unless you agree, nobody can take out additional loans on the property.

How Can You Change a Joint Tenancy to a Tenancy in Common?

Suppose you own a property as joint tenants and want to change the type of ownership. You can change it to tenants in common. This is called severing a joint tenancy.

Severing in England and Wales

You must fill out an official form, which is from SEV. It is available on If not you, then a legal professional can complete it. Send this form along with any supporting documents to the HM Land Registry.

You must give a written notice beforehand in case the other joint tenants do not agree to sever.

Severing in Scotland

In Scotland, the procedure is different. It is a requirement to change the legal papers, also called title deeds, to the property. You should consult a solicitor to go through with this. Furthermore, all other joint tenants must agree to this change.

Severing in Northern Ireland

In Northern Ireland, you must fill in a ‘transfer of whole’ form. You can find it online from the Department of Finance. Then, you submit it to Land & Property Services. As usual, all other joint tenants should agree.

You can still sever a joint tenancy even if the other joint tenants do not agree to it. For that, you must take out a mortgage, usually of a small amount, on their share of the property. Then, you must make the repayment as soon as possible. This is the most common way of severing joint tenancy when other joint tenants do not agree. Therefore, you must know the rules regarding an HMRC jointly owned property.

How Can You Change a Tenancy in Common to a Joint Tenancy?

If you are a tenant in common, then you can change that type of ownership to a joint tenancy. The method differs in the following places:

In England and Wales

You must fill in a trust deed, which is a legal document. This is a confirmation that every single one of you wants to become joint tenants. Your alternative is a legal professional. Under the circumstance that you already have a trust deed, you must update it.

Suppose there is a restriction on the title deed to your property. It does not allow you to sell the property unless you can meet specific conditions. Then, you must cancel the restriction by applying to the HM Land Registry. For that you must complete an official form, form RX3. This is available on Also, you must send all the necessary paperwork to the HM Land Registry. Hence, you must know the rules for an HMRC jointly owned property.

In Scotland

It is a requirement to change the legal papers, also called title deeds, to the property. You should consult a solicitor to go through with this. All other joint tenants must agree to this change.

In Northern Ireland

Upon agreement amongst the owners, you can complete a ‘transfer of whole and or part’ form. This is available online from the Department of Finance. Then, you must submit it to Land & Property Services to become joint tenants.

How to Change from a Joint Tenancy to Tenants in Common

Ending Joint Ownership

You all have equal rights to reside in the property as joint property owners. If any one of you decides to sell the property, then everyone else must agree to this.

Problems may arise in this situation. Maybe you are splitting up with your partner and one of you does not want to leave the property. Or perhaps your co-owners are your friends and one of them gets a new job and is going to relocate.

In case you decide to sell, and the other owners do not agree, then you must get a court order. However, it is stressful and rather expensive to go to court. Therefore, you should consider avoiding this option if possible. Hence, you must understand the process for selling an HMRC jointly owned property.

It is ideal to draw up a legal agreement. This is called a declaration or deed of trust. You can draw this up before you move in. It includes the following:

  • If a joint owner wants to sell, then how much notice should they give?
  • When can you sell the property?
  • How much of the sale price will each person receive.

As a joint owner, you should get legal advice. This way, you can ensure that the agreement fairly represents your interests and is correct.

What are the Tax Implications of an HMRC Jointly Owned Property?

For tax purposes, as a joint owner, you have an equal share in the property. It is most probable that you will end up paying income tax on the rental income you get from the property. Additionally, you must pay capital gains tax when you decide to sell the property for a profit.

How Does Capital Gains Tax Apply to a Jointly Owned Property?

Suppose you decide to sell a jointly owned property at a profit. Then, you may end up paying capital gains tax on your share of the property. How do you calculate the gain? Well, you subtract the cost of the property from the sale price. You also subtract any costs that relate to the sale or purchase of your property. Each joint owner will receive a portion of the gain according to the share of the property they own.

Do Any Stamp Duty Land Tax (SDLT) Exemptions Exist for Jointly Owned Properties?

Unfortunately, you cannot get any specific Stamp Duty Land Tax (SDLT) exemptions on jointly owned properties in the UK. However, you can reduce Stamp Duty Land Tax (SDLT) if you are a first-time buyer. This is also possible if the value of your property is less than the Stamp Duty Land Tax (SDLT) threshold. For that, you must meet the restrictions. Now, you understand the tax implications of an HMRC jointly owned property.

The Distribution of Rental Income and Expenses Amongst Joint Owners

When it comes to rental income and expenses, their division amongst joint owners is according to their share of ownership. Nevertheless, the joint owners can agree to a different arrangement of rental income and expenses.

Inheritance Tax Implications for HMRC Jointly Owned Property

Inheritance tax may apply to joint ownership of property in the UK. It depends on the circumstances of the joint owners and the type of ownership they have. If you wish to understand how inheritance tax applies to jointly owned properties, then you should seek professional advice.

Can a Joint Owners File a Joint Tax Return?

The short answer is no, you cannot file a joint tax return. In the UK, you cannot file a joint tax return with your partner or your spouse. This is because you must file your own tax return and declare your own share of the rental income. Also, you should declare your own capital gains.

What Happens If One of the Joint Owner Passes Away?

Suppose that one of the joint owners passes away. Then, their share of the property, along with their tax liability, transfers to their estate. Or it goes to the surviving joint owner or owners. This is according to either their joint ownership agreement or their will.

Can you Transfer a Jointly Owned Property to Another Person Without Tax Implications?

If you decide to transfer your jointly owned property to another person, then several tax implications can arise. For example, Stamp Duty Land Tax (SDLT) and capital gains tax. If you want to fully comprehend these tax implications, then it is best to seek professional advice. You can reach out to a specialist property accountant.


To conclude, the rules and regulations surrounding HMRC jointly owned property are complex. You should understand the type of ownerships and their differences before you decide to purchase a jointly owned property. Furthermore, you should know your rights as a joint owner. While knowing your rights is important, so is knowing what to do if you decide to sell the property. Problems can arise if the other joint owners do not agree to sell the property. However, there are ways to deal with it. Thus, as a joint owner, you should know the legalities of selling the property.

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