Types of property ownership in the UK

How many types of property ownership are there in the UK?

In England and Wales there are three common types of property ownership on the market:

• Sole ownership
• Joint ownership
• Common ownership

When it comes to owning and renting property, there are three types that are of particular interest.

Sole ownership

This is where a property is owned in one individual’s name and the income and capital gains are chargeable on that individual. Income and gains cannot be shared with a spouse or civil partner for tax purposes.

Joint ownership (Joint tenants)

This is where the whole property is owned jointly and if one of the joint owners dies then the property automatically vests with the remaining owner(s). The interest in a jointly owned property cannot be left in a will until the last survivor becomes sole owner. Because the individuals are entitled to an equal share in the whole of the income and capital gains, they are shared equally and no election can be made for a different split of income.

Common ownership (Tenants in common)

This is where effectively a proportion of the property is owned by an individual. This may be equal or it may be in different proportions. If one of the tenants dies then his/her share goes into their estate and is dealt with by the will or according to the rules of intestacy. If the property is owned in different shares and the owners are not married/civil partners then the income and gains are divided in proportion to the ownership. In the case of married couples/civil partners, the income is treated as shared equally (whatever the beneficial ownership) unless they both make a declaration confirming the actual split of income based on the beneficial ownership of the income and the property. The gain would follow the beneficial ownership.