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Where Taxpayers and Advisers Meet

Joint tenancy an rnrb

vik2001
Posts:65
Joined:Sat Nov 17, 2012 2:24 am
Joint tenancy an rnrb

Postby vik2001 » Wed Jan 15, 2020 5:45 am

If mother gifted part of property to me as joint tenants and not Tenants in common is she still entitled to RNRB upon her passing?

I take it if we was tenants in common the RNRB wouldnt apply to her upon passing? As she gets 10 to 15% discount as TIC as so do i if i passed

maths
Posts:8037
Joined:Wed Aug 06, 2008 3:25 pm

Re: Joint tenancy an rnrb

Postby maths » Wed Jan 15, 2020 3:16 pm

The RNRB arises only on inheritance on death not lifetime gifts.

If mother gave you say 50% in her lifetime RNRB would only apply to the 50% she retains if she then leaves this 50% to you in her will. This assumes that following the lifetime gift the beneficial interests of you/mother are held as tenants in common.

If such interests following the lifetime gift are however held as beneficial joint tenants then on mother's death her 50% automatically becomes yours as the survivor (ie not under her will) but again RNRB would apply to the 50% you then acquire.

vik2001
Posts:65
Joined:Sat Nov 17, 2012 2:24 am

Re: Joint tenancy an rnrb

Postby vik2001 » Thu Jan 16, 2020 5:31 pm

Thanks maths.
Also where its says in hrmc site when giving away property not to pay rent you must give away part of the property and new owners must live with you.
does mean that if you give away part of the property it can be as joint tenants with survivorship . Doesnt have to be as tenants in common 50/50 shares.
Is it assumed with joint tenants that your not giving away whole of property?

maths
Posts:8037
Joined:Wed Aug 06, 2008 3:25 pm

Re: Joint tenancy an rnrb

Postby maths » Thu Jan 16, 2020 6:10 pm

X owns a property and decides to gift a part of it.

This could be achieved, typically, by say a declaration of trust by X.

If X declares that henceforth he holds the property as joint tenants for X and Y then X and Y will be joint beneficial tenants; effectively X and Y each have a 50% beneficial interest.

OR

X could declare that he holds the property for X and Y as tenants in common (say 90/10; 80/20 etc).


Under either option X has gifted a part of his property to Y.

vik2001
Posts:65
Joined:Sat Nov 17, 2012 2:24 am

Re: Joint tenancy an rnrb

Postby vik2001 » Thu Jan 16, 2020 6:31 pm

So as joint tenants its always 50/50 and it cant be no other way. And that can be seen as giving away part of the property if X was at first sole owner?

There was no separate declaration of trust document apart from what is written on land registry. We choose to hold it on trust as joint tenants. Is that ok? Its seen as 50/50 even though we didnt specify 50/50?

Thanks once again maths

maths
Posts:8037
Joined:Wed Aug 06, 2008 3:25 pm

Re: Joint tenancy an rnrb

Postby maths » Thu Jan 16, 2020 7:56 pm

All correct.

vik2001
Posts:65
Joined:Sat Nov 17, 2012 2:24 am

Re: Joint tenancy an rnrb

Postby vik2001 » Thu Jan 16, 2020 9:26 pm

So what does it mean when it says joint tenants own the whole of the property. I take it thats not referring to a specific share or is that something different.

Also can a undivided share be joint tenants or tenants in common?

vik2001
Posts:65
Joined:Sat Nov 17, 2012 2:24 am

Re: Joint tenancy an rnrb

Postby vik2001 » Thu Jan 16, 2020 9:30 pm

Edit

So what does it mean when it says joint tenants own the whole of the property 100%. I take it thats not referring to a specific share or is that something different.

Because what im trying to get to is it says part of the property has to be given away. But if holding as joint tenants dont you own the whole of the property 100% so its not part your holding, but the whole?

Also can a undivided share be joint tenants or tenants in common?

maths
Posts:8037
Joined:Wed Aug 06, 2008 3:25 pm

Re: Joint tenancy an rnrb

Postby maths » Fri Jan 17, 2020 8:07 pm

Terms of property law are often perhaps misleading for the non-lawyer.

If X owns 100% then a gift of part of his beneficial interest to Y occurs whether after the gift X and Y own their beneficial interests as joint tenants or tenants own common.

As joint tenants effectively they own 50% each. However, technically speaking, as joint tenants each tenant is said to be entitled to the whole of the property; neither joint tenant holds a distinct share.

Holding as tenants in common, each co-owner holds an undivided albeit specific share in the property (there is no physical division of. the property).

vik2001
Posts:65
Joined:Sat Nov 17, 2012 2:24 am

Re: Joint tenancy an rnrb

Postby vik2001 » Fri Jan 17, 2020 9:10 pm


As joint tenants effectively they own 50% each. However, technically speaking, as joint tenants each tenant is said to be entitled to the whole of the property; neither joint tenant holds a distinct share.

Holding as tenants in common, each co-owner holds an undivided albeit specific share in the property (there is no physical division of. the property).
So to satisfy HMRC requirement when gifting a part of a property does it need to be tenants in common so they hold a undivided specific share?
Or does it not matter and not come into the equation in hmrc eyes, and joint tenants is still seen as being fine when gifting part of property, even though this way they not holding a specific share but the whole?


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