Tenancy severance is the process of changing how you own property from "joint tenants" to "tenants in common." This is essential for many estate planning strategies, including property protection trusts.
Joint Tenants vs Tenants in Common
Joint Tenants
- Both owners own the whole property together
- When one dies, the property automatically passes to the survivor
- Your will has NO effect on the property
- You cannot leave your "share" to anyone else
Tenants in Common
- Each owner has a distinct share (usually 50/50)
- When you die, your share passes through your will
- You can leave your share to whoever you choose
- Essential for property protection trusts
Why Sever Your Tenancy?
1. Property Protection Trusts
To put your share in a trust (protecting it from care fees and remarriage), you must own as tenants in common. Joint tenants can't do this.
2. Different Beneficiaries
You might want your share to go to different people than your co-owner wants.
3. Inheritance Tax Planning
Some tax strategies require separate shares.
4. Protecting Children from Previous Relationships
Ensures your share goes to your children, not automatically to your partner.
5. Unequal Shares
You might want to own in unequal shares (e.g., 70/30) reflecting different contributions.
How Does Tenancy Severance Work?
Step 1: Written Notice
One owner serves notice on the other(s). This must be done correctly in writing.
Step 2: Register the Change
A "restriction" is placed on the Land Registry title, recording the change to tenants in common.
Step 3: Update Your Wills
Now your share passes through your will, so you need a will (or trust will) that deals with it properly.
The Cost of Tenancy Severance
| Service | Typical Cost |
|---|---|
| Tenancy severance only | £75 - £150 |
| Land Registry fee | £0 (online) |
| Severance + trust wills package | £400 - £700 |
Do You Need Both Owners' Agreement?
No. One joint tenant can sever the tenancy by serving written notice on the other. You don't need their agreement.
However, if you're doing it as part of estate planning, you'll usually both want to do it and both make trust wills.
What Happens to the Mortgage?
Severance doesn't affect your mortgage. You're both still responsible for payments. The mortgage company doesn't need to agree to severance.
Can You Go Back to Joint Tenants?
No, once you've severed, you can't automatically become joint tenants again. However, you could transfer the property into both names as joint tenants, but this creates new legal and tax considerations.
Common Misconceptions
Misconception: "We'll have to sell the property"
Reality: Severance is just a change in how ownership is recorded. Nothing changes practically - you both still own and live in the property.
Misconception: "It affects stamp duty or CGT"
Reality: Severance between existing joint owners doesn't trigger stamp duty or capital gains tax.
Misconception: "One person could sell without the other"
Reality: Both owners must still agree to sell the whole property. Severance just changes what happens to your share when you die.
How Long Does It Take?
- Serving notice: Immediate
- Land Registry registration: 2-4 weeks typically
- Total process: 2-6 weeks
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Frequently Asked Questions
How do I know if I'm joint tenants or tenants in common?
Check your title register at the Land Registry (available online). Joint tenants have no restriction; tenants in common have a "Form A restriction."
Does severance affect the other owner's rights?
No. They still own their share and can still live in and use the property. It only affects what happens when someone dies.
Can I do tenancy severance myself?
Technically yes, but getting it wrong can cause problems. Professional help is inexpensive and ensures it's done correctly.
Should I sever if I'm not getting a trust will?
Usually not necessary unless you want to leave your share to different people than your co-owner. Most couples in simple situations don't need to sever.