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 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
    Check to state you have read and
    agree to our Terms and Conditions

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    If you do not want us to provide your name and email address you may opt out by clicking here .

    If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.