HL Deb 30 January 1996 vol 568 cc1427-37

STATUTORY CO-OWNERSHIP OF MATRIMONIAL HOME

Construction of Chapter II

4. The following paragraphs of this Chapter are framed for the case where, apart from their operation, the husband is the owner, but are to be read as applying equally, with the necessary adaptations of references to the husband or the wife, to produce the converse result in the case where the wife is the owner; and where each is part owner apart from the operation of those paragraphs that alone does not exclude their operation.

Occasions for statutory vesting in co-ownership

5.—(1) Where at the time when this Part comes into force husband and wife have a home in a property and the husband is owner of the property or part of it, then the two shall thereupon become co-owners in respect of the interest the husband then has as owner of the property or part. (2) Where husband and wife set up a home in a property, and the husband is owner of the property or part of it, then the two shall thereupon become co-owners in respect of the interest the husband then has as owner of the property or part. (3)(a) Where husband and wife have a home in a property, and the husband acquires the ownership or a new ownership of the property or part of it otherwise than from the wife or out of her interest, then the two shall thereupon become co-owners in respect of that interest of the husband in the property or part; and (b) a husband is to be treated for purposes of this sub-paragraph as acquiring the ownership of a property or part of a property in any case where he becomes the owner whether by acquiring an interest (or further interest) amounting to ownership or by a change in an interest he already has or otherwise. (4) Where husband and wife have a home in a property, and there is made to the property any addition owned by the husband (whether so owned before it is added to the property or not), then the two shall thereupon become co-owners in respect of the interest the husband then has as owner of the addition. (5) Where a man and a woman having a home in a property marry one another, and the husband is at the time of the marriage (or becomes on the marriage) owner of the property or part of it. then the two shall thereupon become co-owners in respect of the interest the husband then has as owner of the property or part. (6) This paragraph has effect subject to the exceptions in paragraphs 7 to 14 below.

Effect of statutory vesting in co-ownership

6.—(1) Where a husband and wife become statutory co-owners in respect of an interest of the husband in a property or part of a property, then—

  1. (a) if the interest is a legal estate, it shall become subject to a trust for them as beneficial joint tenants; and
  2. (b) if the interest is not a legal estate, it shall vest in the two of them as beneficial joint tenants; and
  3. (c) the same consequences (including the creation of a trust for sale and the severance of any joint interest) shall ensue, as if the like result had been achieved by a written declaration of trust or assignment made by the husband.
(2) Notwithstanding sub-paragraph (1)(c) above, no limitation, covenant or condition restrictive of the husband's right to deal with the property shall be taken to extend or have reference to any transfer of ownership under this section.

Exception from statutory co-ownership of joint interests and certain derivative interests

7. There shall be no statutory co-ownership on any occasion in respect of an interest of a husband where the interest either—

  1. (a) is one he has as joint tenant with the wife; or
  2. (b) derives from one he had as joint tenant with her, the joint tenancy having been severed at a time when they had a matrimonial home in the property; or
  3. (c) is one he acquired prior to that occasion out of an interest of hers in respect of which he is on that occasion excluded under paragraphs 8 to 14 below from becoming statutory co-owner (or would be if she retained the interest).

Right of husband or wife to exclude statutory co-ownership in transitional cases

8.—(1) There shall be no statutory co-ownership on any occasion in respect of an interest which a husband has at the date when this Part comes into force (or which derives from such an interest) if before that date—

  1. (a) the husband has by any writing signed by him declared that the interest he has at that date, being a separate interest, is to be free of statutory co-ownership; or
  2. (b) where the interest is not a separate interest, either the husband or the wife has by a writing signed by him or her declared that both the interest the husband has at that date and the wife's corresponding interest are to be free of statutory co-ownership;
and the person making the declaration under sub-sub-paragraph (a) or (b) above has not, before the occasion in question, by a further writing signed by him or her revoked the declaration. (2) A declaration under sub-paragraph (1)(a) or (b) above must be attested by a person present as a witness when the declaration is signed. (3) In this Chapter references to a separate interest of a husband or of a wife are references to an interest of his or her not being an interest as joint tenant or tenant in common with the other of them (with no implication that they are married at the time referred to). (4) In this Chapter references to a document being signed by a person include its being signed for him by his agent.

Right of husband or wife to exclude statutory co-ownership of interests held before marriage

9.—(1) There shall be no statutory co-ownership on any occasion in respect of any interest which a husband has in any land at the time of the marriage (including an interest acquired on the marriage) if—

  1. (a) he has before the marriage by any writing signed by him declared, either specifically with reference to the wife or generally, that the interest is to be free of statutory co-ownership; and
  2. (b) he has not, before the occasion in question, by a further writing signed by him revoked the declaration or (it being a general declaration) directed that it shall not have effect in the case of the wife.
(2) A declaration under sub-paragraph (I)(a) above must be attested by a person present as a witness when the declaration is signed. (3) For purposes of this paragraph an interest as joint tenant and the interest derived from it by the severance of the joint tenancy are to be treated as one interest.

Right of donor to exclude statutory co-ownership in case of gifts

10.—(1) There shall be no statutory co-ownership in respect of an interest of a husband acquired by gift if the interest given him either—

  1. (a) is a separate interest which is directed by the instrument making the gift to be free of statutory co-ownership; or
  2. (b) is not a separate interest.
(2) Subject to sub-paragraph (3) below, any disposition of an interest in land is a gift—
  1. (a) for purposes of sub-paragraph (1)(a) above, if it is made without consideration in money or money's worth moving from the husband (and is not a disposition by him alone);
  2. (b) for purposes of sub-paragraph (1)(b) above, if it is made without consideration in money or money's worth moving from the husband or the wife (and is not a disposition made by them or either of them alone).
 (3) Where a disposition of an interest in land is made by the exercise of a power of appointment, the interest is to be treated for purposes of this section as acquired by that exercise and not under the instrument conferring the power; but the disposition is not for those purposes a gift unless that instrument was made (as well as the power being exercised) without consideration as mentioned in sub-paragraph (2) above. (4) Where the husband's interest in any land is or was conferred on him as a separate interest by an instrument conferring a power of appointment capable of being exercised in his favour, but he acquires ownership of the land by a release of the power, then if the instrument releasing it directs that the husband's interest is to be free of statutory co-ownership, the direction shall have the same effect under this section as if the husband had acquired his interest by the exercise by that instrument of the power. (5) For purposes of this paragraph an interest as joint tenant and the interest derived from it by the severance of the joint tenancy are to be treated as one interest.

Exclusion of statutory co-ownership by husband and wife '.s agreement for or creation of sole ownership

11.—(1)(a) Subject to any written agreement to the contrary signed by the husband and wife, there shall be no statutory co-ownership on any occasion in respect of a separate interest of the husband—

  1. (i) if at any time before that occasion the husband and the wife have entered into a written agreement signed by them that the interest is or is to be a separate interest and is to be free of statutory co-ownership; or
  2. (ii) if he has acquired the interest by her express disposition in his favour, or the interest became a separate interest or, being a separate interest, was enlarged or improved by such a disposition: and
(b) in sub-sub-paragraph (a)(ii) above any reference to the wife's express disposition in the husband's favour is a reference to a written disposition made and expressed to be made to him beneficially and made by her or made and expressed to be made by her direction. (2) Subject to any written agreement to the contrary signed by the husband and wife, there shall be no statutory co-ownership on any occasion in respect of an interest of the husband if the interest is or derives from one in relation to which sub-paragraph (1)(a)(i) or (ii) above was satisfied at some previous time. (3) For the purposes of this paragraph an interest as joint tenant and the interest derived from it by the severance of the joint tenancy are to be treated as one interest.

Exception from statutory co-ownership where entitlement of husband and wife to shared interest settled by agreement

12.—(1) Subject to any written agreement to the contrary signed by the husband and wife, there shall be no statutory co-ownership on any occasion in respect of an interest of the husband, if—

  1. (a) the interest is not a separate interest, and the fact that they are or are to be joint tenants or tenants in common and, if tenants in common, the relative size of their shares has been specified by a written agreement signed by them or by an instrument such as is mentioned in sub-paragraph (2) below; or
  2. (b) the interest is or derives from one in relation to which sub-sub-paragraph (a) above was satisfied at some previous time.
(2) The instruments referred to in sub-paragraph (1)(a) above are instruments whereby either—
  1. (a) the husband and wife are made beneficial joint tenants or tenants in common of the land or of an interest in it; or
  2. (b) one of them disposes of any right or interest in favour of the other,
 being instruments which satisfy one of the conditions in sub-paragraph (3) below. (3) The said conditions are—
  1. (a) that the entitlement of the husband and wife specified in the instrument as required by sub-paragraph (1) above is in accordance with a prior agreement between the husband and wife; or
  2. (b) that before the occasion in question both the husband and wife adopted the instrument by any act showing an intention to accept the instrument; or
  3. (c) where by the instrument one of them disposes of any right or interest in favour of the other, that before the occasion in question the other adopts the instrument by any act showing an intention to accept the instrument.
 (4) For purposes of sub-paragraph (3)(a) above the instrument (if it specifies the entitlement of the husband and wife as required by sub-paragraph (1)) shall be presumed, unless the contrary is shown, to do so in accordance with a prior agreement between them. (5) For purposes of this paragraph the entitlement of a husband and wife is not specified by an agreement or instrument as required by sub-paragraph (1), if the nature or extent of their interests is left in any relevant respect, other than a respect in which it is affected by the rights of some other person, to be ascertained from outside the agreement or instrument. (6) Sub-paragraphs (3) and (4) of paragraph 8 above shall apply for purposes of this paragraph as they apply for purposes of that paragraph.

Exception from statutory co-ownership to avoid severance from other land

13.—(I) There shall be no statutory co-ownership on any occasion in respect of an interest the husband has in a property or part of a property if at the time—

  1. (a) the husband has a substantive interest in any adjoining or neighbouring land which is not comprised in the property nor would be treated under paragraph 3(2) above as so comprised if owned by the husband; and
  2. (b) the difficulties or disadvantages involved in a severance would be such that, on a sale of the whole in the open market for the relevant estates or interests, subject to any subsisting tenancies but otherwise with vacant possession, it would not be practicable for the property or that part of it to be sold as a distinct lot without the adjoining or neighbouring land or, if it had to be so sold, the price to be expected for the whole would be substantially reduced.
(2) Where but for this paragraph a wife would on any occasion have become statutory co-owner in respect of an interest of the husband in a property or part of a property, and afterwards while the husband is owner of the property or that part of it he ceases to be entitled to a substantive interest in the adjoining or neighbouring land or any material part of it (without the wife having in the meantime become statutory co-owner in respect of the interest in the property or the part of it in question), then this Part shall thereupon have effect as if he had acquired his ownership of the property or that part of it on ceasing to be so entitled. (3) For purposes of this paragraph "the relevant estates or interests" are—
  1. (a) in the case of the property or part of a property in question, the legal estate in respect of which, or in respect of the husband's interest in which, there is an occasion for the husband and wife to become statutory co-owners; and
  2. (b) in the case of the adjoining or neighbouring land, any legal estate in which the husband then has a substantive interest.
 (4) In this Part "substantive interest" means a beneficial interest (whether vested or contingent) other than an interest by way of security only, or by way of rent charge or annuity, or by way of charge under section 26 of this Act.

Effect of bankruptcy or insolvency

14.—(1) There shall be no statutory co-ownership on any occasion in respect of an interest of the husband, if at the time the wife is an undischarged bankrupt. (2) Where a wife, after becoming on any occasion statutory co-owner in respect of an interest of the husband, becomes bankrupt as from that time or an earlier time, then subject to sub-paragraph (4) below the wife shall be deemed not to have become on that occasion co-owner in respect of that interest. (3) Where a wife becomes insolvent, then—

  1. (a) there shall be no statutory co-ownership on any later occasion in respect of an interest of the husband, if the interest she thereby acquired would be included in the assets to be administered; and
  2. (b) subject to sub-paragraph (4) below, she shall be deemed not to have become on any earlier occasion statutory co-owner in respect of such an interest, if the assets to be administered extend (by relation back) to her then assets.
(4) Sub-paragraphs (2) and (3)(b) above shall not affect any dealing by the wife with her interest before the time when she is adjudged bankrupt or becomes insolvent. (5) For the avoidance of doubt it is hereby declared that, subject to sub-paragraph (6) below, the circumstances in which the disposition ("the statutory disposition") supposed, by paragraph 6(1)(c) above, to be made by the husband is voidable by reason of his bankruptcy or insolvency are the same as the circumstances in which an actual disposition of that kind would be voidable. (6) Where the wife and the husband each become statutory co-owners in respect of an interest which the other has as part owner of the land (the two interests being ones which they have as tenants in common) and—
  1. (a) subsequently the husband becomes bankrupt or insolvent; and
  2. (b) the bankruptcy or insolvency is not one within sub-paragraph (2) or (3)(b) above (so that the statutory disposition by the wife is unaffected by the bankruptcy or insolvency),
 the statutory disposition by the husband shall not be voidable by reason of the bankruptcy or insolvency except to the extent (if any) by which the husband's interest as part owner of the land exceeded the wife's (so that avoidance of the statutory disposition will do no more than prevent the wife from having obtained, as co-owner of both interests, more than she had previously as entire owner of the one interest). (7) This paragraph shall have effect in relation to bankruptcies and to insolvencies under the law of any part of the United Kingdom or elsewhere. (8) In this paragraph references to insolvency are references to the making, in bankruptcy proceedings, of a composition or arrangement under which assets are to be administered by a trustee for the benefit of the insolvent's creditors and references to the assets to be administered shall be construed accordingly.

Effect of minority or incapacity

15.—(I) Notwithstanding anything in paragraph 6(1)(c) above, that paragraph shall have effect—

  1. (a) in relation to any interest of a husband who is a minor as if he were of full age;
  2. (b) in relation to any interest of a husband who is an incapacitated person as if he were not incapacitated.
(2) A declaration or revocation made for purposes of paragraph 8 or 9 above shall not he affected by the minority of the person making it.

Minority: agreement or instrument excluding statutory co-ownership

16.—(1)(a) This sub-paragraph applies to an agreement which, under paragraph 11 or 12 above, has the effect of excluding a wife from statutory co-ownership in respect of an interest of the husband in any land, and in this sub-paragraph "the relevant law about minors" means the law relating to the effect on a contract of the minority of a party to the contract. (b) If the agreement was made in contemplation of the use or possible use by the parties of the land (or a property comprising it) as a matrimonial home, the agreement shall be treated for purposes of the relevant law about minors as a contract for the husband to acquire from the wife her interest as statutory co-owner. (2)(a) This sub-paragraph applies to an agreement, disposition or instrument which under paragraph 11 or 12 above has the effect of excluding a wife from statutory co-ownership in respect of an interest of the husband in any land. (b) Where the agreement, disposition or instrument is avoided by the wife or husband by reason of her or his minority paragraph 5(3) above shall apply as if on the avoidance the wife and the husband each acquired (otherwise than from the other or out of the other's interest) the interest she or he then has in the land in question.

Exemption from stamp duty on reversal of statutory co-ownership

17. Stamp duty shall not be chargeable on an instrument executed within two years after a husband and wife have become statutory co-owners of a property or of land comprised in a property, in so far as the instrument operates to vest in each of them the same interest (if any) in any land as he or she would have had if on the occasion in question there had been no statutory co-ownership in respect of any interest of either of them in the property or land comprised in it.

    cc1433-7
  1. CHAPTER III 2,750 words
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