Valuing jointly owned assets
The deceased person may have owned property or other assets jointly with other people. You will need to calculate the value of their share of these assets.
The value will usually be based on the proportion of the asset that they owned at the time of their death.
Two ways that property and other assets can be owned jointly
A good starting point in understanding how to value jointly owned property and other assets, is to be aware that in law there are there are two ways that property (both freehold and leasehold) and assets can be owned jointly.
Jointly owned property and assets can be held either as ‘joint tenants’ or as ‘tenants in common.’
A joint tenant (called a joint owner in Scotland) owns the property or asset with one of more people jointly and equally. The deceased person’s share passes automatically to the other joint owners.
A tenant in common (called a tenant in common in Scotland and sometimes a coparcener in Northern Ireland) owns the property or asset with one or more people but each share doesn’t have to be equal and each tenant can give away their share as they want.
Valuing property or other assets held as joint tenants
If a property or other asset is owned by joint tenants then the whole property belongs to all the co-owners jointly. This means that each owner does not have a separate and distinct share. In any dealings regarding the property all the joint owners must act together as a single owner.
To value the deceased person’s share, simply divide the total value of the property by the number of joint owners, including the deceased person, before the death.
Most jointly owned property is held as joint tenants but you should not assume this. Tenancies in common are not completely unusual and, if in doubt, you should check the point at the land registry.
As property held under a joint tenancy will automatically pass to the surviving joint owners it will not form part of the deceased’s estate except for the purposes of calculating inheritance tax. These rules of joint tenancy override anything in the will.
As such it will not form part of your responsibilities, acting as a personal representative (although it is usual for personal representatives to arrange a transfer of title to the other owners).
Valuing property or other assets held as tenants in common
If a property or other asset is owned by tenants in common, then the property belongs to them jointly but each co-owner owns a separate and distinct share. This share will be determined by the legal document that set up the joint ownership.
To value the deceased person’s share, you will need to calculate the deceased person’s specific share in the property.
You should note that each owner can deal with their share independently of their fellow owners. They can therefore leave their interest in the property to a beneficiary in their will. The deceased person’s share of the property thus forms part of their estate.
Value of share in jointly owned property reduced if other owner not a spouse or civil partner
The value of the deceased person’s share in a jointly owned property can be reduced by 10 per cent if the other owners are not the deceased’s spouse or civil partner.
This reduction reflects the problems of selling a jointly owned property on the open market and the ongoing right of the other owners to live there. (This rule is slightly different in Scotland as a joint owner has the right to force a sale and divide the property after the death of a joint owner).
Stocks and shares held jointly
Almost all jointly held accounts with financial institutions will be held under a joint tenancy. This is also the case for individual stocks and shares held jointly. Nevertheless, if you are in any doubt you should check.
Valuing joint bank or building society accounts
If the deceased owned a joint bank or building society account, you should only include in your valuation the amount of money that the deceased person contributed to the account.
As it is likely that a bank or building society account was held under a joint tenancy, the balance will not usually form part of the deceased’s estate. The surviving holder will be entitled to all the money in the account. When the bank has seen the death certificate, the joint account will simply be transferred into the remaining account holder’s name.
Joint insurance policies
You should only include the deceased person’s share of a jointly owned insurance policy. This is the case even if the policy is a ‘joint life and survivor policy’ where the deceased person’s share will simply be half the value of the policy.
Please note that information which we provide through Lasting Post is in outline for information or educational purposes only. The information is not a substitute for the professional judgment of a solicitor, accountant or other professional adviser. We cannot guarantee that information provided by Lasting Post will meet your individual needs, as this will very much depend on your individual circumstances. You should therefore use the information only as a starting point for your enquiries.