To wonder why there isn’t public outrage about this?

[Blusterylimp]

If a couple isn’t married but own their property between them, the surviving one will need to pay inheritance tax on their partners half of the house (and other assets) if they die.
Effectively they will lose their home to pay the IHT unless they also have huge savings.
How can that be allowed in this day and age when so many couples cohabit without getting married?

There usually is. It's good for guidance, but you would always seek the advice of a financial adviser.

I am afraid you are misinformed on this. All assets of someone deceased forms part of their estate including a property share (half) owned as joint tenants. If the property share passing to the surviving joint owner was In excess of the current IHT threshold of £325,000 then IHT absolutely would be due.

@Blusterylimp The mistake you made is that you didn't buy your house as tenants in common and ring fence your proportion of the equity you put in.

A marriage contract or civil partnership contract IS the legal way to sort this out.
Otherwise you are going to have a complete mess of lodgers, flat mates and all manner of co-habitees entitled to property and assets. How do you prove what kind of relationship has existed and for how long?
If you want your partner to inherit your assets free of tax, enter into a legal contract.

This. You can't have it both ways.

I'm not sure it is if it's a house being passed on.

For married couples the threshold is £1M is a house is passed onto children.

No, it is still subject to IHT whether tenants in common or joint tenants

I'm not married (also not rich enough for this to affect me) and even so I think you are being totally ridiculous. Get married, have a civil partnership, or pay the tax.

It's insane to me that so many people on here seem to be basically suggesting that you should be forced into a civil partnership by living together. Do you really think that if that was the case for taxes it would not also be the case for splitting assets? Either your assets are shared or they aren't. You can decide.

Hardly. Tenants are not 'tenants in common'.
Yes, that's the legal term but it's not what it means.

I am a tenant in common and so is my sister for my parent's house. This means a quarter of it passes to us when one dies, so the remaining spouse cannot be forced to sell for nursing home fees unless we agree to the sale.

I was going to say same!

Me and my OH haven't been arsed getting married, but are joint tenants. We don't have anything else of value! So a marriage would be irrelevant to us.

There are around 28 million home owners in UK. Many of those properties will not be able to be sold at £325 or under to avoid IHT on the property alone (in the current market and likely property prices will continue to increase), not taking into account any other assets. That is a very large minority if the entire population is around 68 million and families are obviously made up of more than 1 sharing a home...

I agree with you, OP. I think it's outrageous that any family unit - whether that's a couple, friends or siblings - who set up home and combine their lives together - are at risk of losing that home when one of them dies. Unfortunately you have to play the government's game and do the civil partnership thing. That doesn't help siblings though.

Then you can both afford the tax.

Incorrect.
The reason there is no inheritance tax when you own a house with your spouse, is that the spouse exemption applies to the estate on death. The way you own the house together is irrelevant.

JT means the house is automatically inherited by the survivor, with no need for Probate. But you could own as JT with your sister or a friend. The inheritance would pass by right of survivorship, but IHT would be paid.

TIC means the house is owned in distinct shares as you say, and you can leave your share in your Will to whoever you like. If you leave it to your spouse, there will be no IHT because of the spouse exemption. If you leave it to your sister, there will be IHT.

I am glad you have taken estate planning advice from a solicitor, but perhaps their explanation was not as clear as you / they thought, or you need to revisit the advice in case they got it wrong.

But you are misinformed. You would still have to pay IHT on his half of the property. That’s what I think is unfair.

I can assure you I am 100% correct. The only person you can leave things to without IHT implications is your spouse.
You are right a married couple with a property can leave a joint estate of £1million to their direct descendants, children or grandchildren.

OP I find your attitude a bit hard to follow.

• earlier on, you said you don’t want to get married because you can’t be bothered with the faff of a party.

• now you’re thanking/quoting a poster who said they don’t want to get married to protect their finances.

which is it?

I think it would be easier for people to give you practical advice if they knew why exactly you are reluctant to get married. You don’t want to have to get married to protect your finances, but who are you protecting your finances from? The government, your partner, your family?

maybe start from the position of who do you want to have complete control of your finances, and who do you not want? And work backwards from there.

if you fully trust your partner, and don’t want the government or your family to have any stake - marriage seems to be the solution. I wouldn’t see why a “party” (which you have full control
over ie you don’t have to have a party) is the deal breaker.

This is massively incorrect, and the reason many people get a horrible shock when their partner dies and they get an IHT bill.

Take out an insurance policies on each other's lives to cover what you anticipate the inheritance tax payable to be.

As life insurance will become extremely expensive when you get old, also start a savings account for the anticipated inheritance tax amount with the aim of being able to self-insure post 65.

You're wrong on the main residence being £500k threshold. It's £325 threshold if main residence too. That's why I've made the point about house valuations. If your house is valued at £400k and notwithstanding other savings you will pay 40% tax on £75k. So thats £30k tax. You have got 10 years to pay though so you don't have to sell up straight away. And pensions aren't included so there's that.

It’s only half of the house inherited, so applies to houses over £650,000. Assuming no other assets.

Which is why as a single mum, we (or rather our kids) get penalised yet again.

Partner only inherits half of the house. They already own half. So they only pay tax if house worth more than £650,000.

No you won't.
If the house is worth £400k, the estate only counts £200k so no IHT due.

1. Next of kin legally does not exist
2. get a Lasting Power of Attorney done (you can do this for financial and/or health matters. You can do this online or get a professional to do it)
3. Even if you're married, your spouse does NOT automatically have LPA!