Except in the case of the matrimonial home which is capital gains tax exempt, it is mostly appropriate that all jointly owned assets be held as tenants in common rather than as joint tenants. Only an asset held as tenant in common can pass via your Will. An asset held as joint tenant does not but rather passes directly upon your death to your surviving co-owner/s. This can result in a number of problems, namely:-
- The wrong person may inherit the asset;
- The benefits of passing assets to beneficiaries via your Will are lost; and
- For capital gains tax purposes, the passing of your share of the jointly owned asset is a deemed disposal and, because the rollover benefits of a bequest by Will are lost, a tax liability may well accrue.
This is a particular trap in business partnerships where a survivor will need to seek a Court order to avoid the jointly owned asset passing directly to their business partner rather than their nominated beneficiary under their Will. |
