UK: From Cradle to Grave: Living Together

Last Updated: 1 March 2006
Article by Kelly Noel-Smith and Stephen O'Reilly

In the first bulletin in this series,we dealt with some of the issues faced by individuals in the early stages of adult life. In this bulletin,we discuss cohabitation issues which affect all couples whether married, unmarried or, after 6th December 2005, registered under the Civil Partnership Act1.These issues include buying a house together and the associated tax benefits and tax burdens.

Buying property together

How should the property be held? If the title to the property is registered in a couple’s joint names, they will each be the legal owner of the property. That means that both have the legal right to live in the property and a financial interest in the value of the property. However, it is important to note that a property registered in joint names can be owned as "joint tenants" or as "tenants in common".

Joint tenants each own all of the property. If one party dies, the property passes automatically to the survivor. Wills (or the intestacy provisions) cannot override this right of survivorship. Many married couples choose to buy a property as joint tenants to ensure that the survivor of them inherits the property automatically.

Joint tenancies can be severed to create a tenancy in common, should both owners be in agreement. Severance is sometimes used to effect inheritance tax planning.

Tenants in common, on the other hand, each have a distinct share in the property. Where there are two owners, unless it is agreed that the shares will not be equal, each will be presumed to have a half share; if there are three owners each will hold a third, and so on. It is possible to specify in a declaration of trust (see below) what proportion of a property is held by each owner. The share is often, but not always, reflective of financial contribution. Tenants in common are entitled to their proportionate percentage of the sale proceeds on a sale of the property. On death, their share of the property will form part of his or her estate and does not pass to the other owners of the property by survivorship. A tenancy in common will be dealt with under a person’s Will or under the rules of intestacy.

The intestacy rules, generally speaking, favour the deceased person’s immediate family. This means that, for a couple who are neither married nor registered as Civil Partners, the surviving partner may receive nothing. It is imperative, therefore, that unmarried partners and couples who are not registered Civil Partners and want to make sure that their estate benefits their partners on death, should make a will.

Note that registration as a Civil Partnership will revoke an existing will unless the will was made in anticipation of forming the partnership. Consequently, couples planning to register their partnerships should arrange for new wills to be drawn up as soon as possible. Failure to do so may leave civil partners intestate. This is similar to the provisions applying to married couples: marriage revokes a will unless that will is made in contemplation of that marriage.

Shared property without joint investment: married couples; Civil Partners; and co-habitees

When property is registered with the Land Registry in the name of one person, that person will be the legal owner of the property and will have a legal right to occupy the property. The spouse or partner living with the legal owner of the property has no strict legal rights in relation to the property.

In certain circumstances, a non-owning spouse occupying a property may be able to apply for an occupation order under the Family Law Act 1996. A non-owning spouse or partner may also be able to argue that he or she has a "beneficial interest" in the property, and may therefore be entitled to a share of the property. If the non-owning partner has made a payment towards the purchase of the property (for example by contributing the deposit or by contributing to mortgage payments), it may be possible to establish a financial claim. The court can also order, though does so only occasionally, that the property be sold immediately in order to pay the partner his or her share in its equity. The court is most likely to refuse to make such an order if satisfied that the home was bought as a home for the family: generally speaking, any application for the sale of the home, prior to the children reaching 16 or 18, will be refused.

If an agreement has been entered into, or an understanding has been relied upon that the property was to be shared by the couple, and one partner had relied on that agreement to their detriment or significantly altered their position in reliance upon that agreement, the court may decide that the partner who is detrimentally affected is entitled to some financial benefit from the property. Such an agreement need not necessarily be in writing as the court will consider improvements made to the property since the time of the alleged agreement, and/or who has been looking after the family living at the property. A potential interest in a property can be registered (at the Land Registry) on its title as a caution.

Cohabitation agreements

A "cohabitation agreement" or a "living together agreement" can be drawn up for un-married couples. These deal with day-to-day shared costs, namely:

  • the payment of household expenses;
  • how purchases for the home are to be owned / shared; and
  • credit cards payments and loans.

Such agreements are primarily a practical mechanism for everyday life. However, they can also deal with, for example, how the house and furniture should be divided were the relationship to end. Although these agreements do not have a clear status in law, a court will generally follow them if they produce a fair result for both partners, and if both partners were honest with each other about their finances at the start. A court is more likely to uphold a cohabitation agreement where both partners took independent legal advice before and during the formation of the agreement.

Declarations of trust

A "declaration of trust" can set out not only the proportions in which the property is owned, but also a couple’s respective responsibilities, for example, payment of bills or mortgage repayments. The declaration can also provide a framework for co-owners to formalise their respective shares or act as a safety net in the event of withdrawal from the co-ownership arrangement. Provided the declaration is properly drafted, it will be legally binding in the same manner as any legal contract between two parties.

Tax benefits and burdens

Under the CPA, registered Civil Partners will be treated in an identical fashion to married couples for tax purposes. This means that:

  • spouses and Civil Partners benefit from the Inheritance Tax exemption in respect of lifetime gifts between them and on property passing from one to another on death. This allows for tax planning with two nil rate bands which, at current rates, could afford a tax saving of £110,000;
  • disposals of assets between spouses and between Civil Partners takes place on a no-gain, no-loss basis and do not therefore attract Capital Gains Tax ("CGT"). Disposals of assets between an unmarried couple are subject to CGT;
  • whilst a married couple and Civil Partners share one principal private residence relief ("PPR") between them, an unmarried couple can have one home each and can both claim PPR, subject to the fulfillment of certain criteria. Before marriage or registration, couples owning more than one property should consider selling PPR property, or transferring it into trust to lift its base value to market value at the time of the transfer.
  • Summary

    Couples, whether married, unmarried or Civil Partners need to think carefully about how to own property together and the various consequences of doing so. Consideration needs to be given to the tax and estate implications in addition to the practical effects.


    1 The Civil Partnership Act 2004 (the "CPA") The CPAreceived Royal Assent on 18th November 2004 and came into effect on 5th December 2005. It allows same sex couples to register their relationship, broadly giving them the legal rights and obligations of a married couple. Please see our separate July 2005 Bulletin for full details.

    © RadcliffesLeBrasseur

    The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

  • To print this article, all you need is to be registered on

    Click to Login as an existing user or Register so you can print this article.

    In association with
    Related Topics
    Related Articles
    Related Video
    Up-coming Events Search
    Font Size:
    Mondaq on Twitter
    Register for Access and our Free Biweekly Alert for
    This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
    Email Address
    Company Name
    Confirm Password
    Mondaq Topics -- Select your Interests
     Law Performance
     Law Practice
     Media & IT
     Real Estate
     Wealth Mgt
    Asia Pacific
    European Union
    Latin America
    Middle East
    United States
    Worldwide Updates
    Registration (you must scroll down to set your data preferences)

    Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

    • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
    • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

    Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

    Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

    Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

    Please indicate your preference below:

    Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
    No, I do not want Mondaq to share my personal data with Contributors

    Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

    Yes, I am happy to received promotional communications from Mondaq
    No, please do not send me promotional communications from Mondaq
    Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

    Use of

    To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

    You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

    You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

    In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

    however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

    Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

    Mondaq’s Rights and Obligations

    Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

    Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

    Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

    Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


    The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


    Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

    These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

    You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

    No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

    If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

    Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

    By clicking Register you state you have read and agree to our Terms and Conditions