Right of Survivorship: What You Need to Know
If you jointly owned property with someone who has passed away, you need to understand the Right of Survivorship, a legal principle determining how ownership of the property transfers after death.
This guide provides the essential information you need now about the Right of Survivorship in the UK. We'll explain how it works, the steps you must take, and answer your most pressing questions.
What is the Right of Survivorship?
Right of Survivorship is a legal principle that, in the case of joint tenancy, dictates that the legal right to ownership of a jointly owned property automatically passes to the surviving owner(s) when one owner passes away.
This legal right transfers immediately upon death. However, formal registration of this change of ownership with the Land Registry is required. This typically involves completing a Deceased Joint Proprietor (DJP) form and providing a death certificate.
It simplifies the process of transferring ownership compared to Tenancy in Common (explained below), where ownership does not automatically transfer, but it does require action from the surviving owner to formally register the change. Get in touch if you need help registering the change in ownership.
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- What are my responsibilities?
- What forms do I need to submit to HMRC?
- How do I get the title deeds?
- How much inheritance tax (IHT) is payable?
How does the Right of Survivorship work?
The specifics of Right of Survivorship depend on how the property was jointly owned. There are two ways to co-own property: Joint Tenancy and Tenancy in Common.
How Right of Survivorship affects Joint Tenants
If you owned the property as joint tenants, the legal right to the entire property automatically transfers to the surviving joint tenant(s) upon the death of one owner. This is a common arrangement, particularly for couples.
For example, if you and your spouse owned your home as joint tenants, and your spouse passed away, the legal right to the property immediately transfers to you.
However, you need to complete a Deceased Joint Proprietor (DJP) form and provide a death certificate to the Land Registry to formally update their ownership records. This is a necessary administrative step to reflect the change in ownership.
How Right of Survivorship affects Tenants in Common
If you owned the property as tenants in common, Right of Survivorship does not apply. Each tenant in common owns a specific share (e.g., 50%) of the property, and that share becomes part of their estate when they die.
Their share will be distributed according to their will or the rules of intestacy if they don't have a will. This means the property may need to be sold to distribute the assets, or it could be passed on to other beneficiaries named in the will.
Example 1 (Parent and Child): If a parent and child own a property as tenants in common, and the parent dies, their share of the property will not automatically pass to the child. Instead, it will be distributed according to the parent's will (or intestacy rules if no will exists).
The child would only inherit the parent's share if specifically named in the will or if they are the next of kin according to intestacy rules.
Example 2 (Spouses and Buy-to-Let): If spouses own a buy-to-let property as tenants in common, and one spouse dies, their share of the property will form part of their estate. It will not automatically transfer to the surviving spouse.
The surviving spouse could co-own the property with whoever inherits the deceased spouse's share, which could be other family members, children, or even a trust. The property might need to be sold if the beneficiaries decide they don't want to co-own it, but it's not an automatic requirement.
How long does the Land Registry take?
If you apply yourself, the Land Registry's turnaround time for processing the DJP form and updating the register is typically within two weeks, provided you submit the correct documents and forms and they are not lost in the post.
Our clients at SAM Conveyancing often benefit from much faster service, with applications processed in a matter of days. In some cases, we can even update the records within 24 hours of receiving the necessary information digitally. This expedited service can be particularly beneficial if you are looking to sell the property quickly.
Right of Survivorship and your mortgage options
If you're the surviving joint owner of a property and wish to obtain a new mortgage, you will need to formally update the property's ownership records with the Land Registry before a lender will consider your application.
While the legal right to the property may have passed to you automatically upon the death of the other joint owner (in the case of joint tenancy), mortgage lenders typically require the title to be formally in your sole name. This means completing the Deceased Joint Proprietor (DJP) process and registering the death with the Land Registry.
Lenders require clear and sole ownership to ensure their security interest in the property. They want to be certain that there are no other potential claims on the property that could complicate a future sale or repossession. Having the deceased's name removed from the title provides this assurance.
Once the Land Registry has updated the records to reflect your sole ownership, you can proceed with your mortgage application. Be prepared to provide the lender with a copy of the updated title document from the Land Registry as proof of ownership.
It's also a good idea to discuss your situation with a mortgage advisor or broker early in the process. They can advise you on the specific requirements of different lenders and help you find the best mortgage options for your circumstances.
It's important to note that even if you were already on the existing mortgage with the deceased, you may still need to apply for a new mortgage in your sole name.
This is because the original mortgage agreement was likely based on both of your financial circumstances. The lender will need to assess your individual financial situation to determine your eligibility for a new loan based off your sole eligibility.
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Do you need Grant of Probate for Right of Survivorship?
In cases of joint tenancy, where the Right of Survivorship applies, you generally do not need a Grant of Probate to establish the transfer of the legal right to ownership.
The transfer happens automatically by operation of law. However, as mentioned above, you will need to complete the DJP form and provide a death certificate to the Land Registry to formally register the change in ownership.
While you don't need probate to own the property, you need to follow the DJP process to officially record that ownership with the Land Registry.
We at SAM Conveyancing can assist you with this process for a fee of £299 INC VAT. This service can save you time and hassle during an already stressful period.
Do I need to remove the name before the sale?
Removing the deceased's name from the property title (by completing the DJP process) can often speed up the sale process. The Deceased Joint Proprietor (DJP) process with the Land Registry is usually quick and straightforward.
What tax is payable in a Right of Survivorship?
When a joint tenant passes away, the transfer of ownership to the surviving joint tenant(s) itself does not typically trigger immediate Inheritance Tax (IHT), Capital Gains Tax (CGT), or Stamp Duty Land Tax (SDLT).
This is because the property was already jointly owned 100%, and the transfer is considered a change in ownership structure rather than a sale or gift to a new party. Essentially, you're not buying or receiving anything new; your existing ownership simply becomes sole ownership.
However, the deceased's share of the property is still considered part of their estate for IHT (Inheritance Tax) purposes. This means that IHT may be payable on the value of that share, depending on the overall value of their estate and any available IHT exemptions or reliefs, such as the marriage allowance. For example, if the deceased's estate (including their share of the property) exceeds the IHT threshold, IHT might be due.
When you eventually sell or transfer the property to a third party, CGT may be applicable on any increase in value from the date of the deceased's death to the date of the sale. SDLT would only apply if you were transferring ownership to someone else during your lifetime (not upon the initial transfer via Right of Survivorship). The receiver of the property, not the seller/transferor, pays SDLT.
Because tax laws are complex and individual circumstances vary significantly, it's strongly recommended that you consult with a tax advisor or solicitor only if you are selling or transferring the property to determine if tax is applicable in your specific situation.
What happens if I die?
If you were the sole owner of the property and you pass away, your executors will handle the sale of the property as part of your estate.
They will need both death certificates, a Grant of Probate (or Letters of Administration if you don't have a will), and your will to distribute the proceeds from the sale according to your wishes. It's vital to have a valid will in place to ensure your property is distributed as you intend.
You may want to consider updating your will now that you are the sole owner of the property. Contact us today for assistance with will-writing and the DJP process, including registering the change of ownership with the Land Registry.
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