Who pays IHT in these circumstances?

[Nimbus1999]

No will, daughters are executors.

Property owned jointly with partner (not married / civil partners). Upon death, transferred 100% to partner (not tenants in common).

50% of property (now owned by partner) plus savings exceeds the nil band of £325,000.

Partner keeps the house. Daughters keep the savings.

Who pays the IHT bill?

Which magazine has ''legal advice' section = you subscribe and then pay extra to join ''legal advice''

I think it is 325 including the 50% of the house

She should absolutely consult a solicitor or tax specialist. However the advice from me, @prh47bridge and @kikilaw is entirely consistent and correct.

For the maths to work on the IHT the PRs have £200k to spend on advice but don’t want to 🤷‍♀️

I highly doubt the savings attract inheritance tax. The property , they were joint tenants, is not part of the estate. It just passes to the partner under right of survivorship.

As has been explained up thread, even though the property passes to the partner under survivorship and does not form part of the deceased's estate, 50% of its value is added to the estate for IHT purposes as the joint owner was not the deceased's spouse or civil partner. The savings are then added to that. If the total exceeds £325k, IHT is payable.

Don't give advice on things about which you know nothing.

A couple of people have confidently said that joint property doesn't attract IHT, and I think they really haven't thought it through. That really would make IHT trivially easy to avoid.

In which case as per my earlier post the IHT on the house is only £1500 this year as it is payable in annual installments of 10 (remainder due if the house is sold).

I would suggest calling the Capital Taxes Office and if the person you speak to doesn't know about assessing the joint tenant asking them to pt you through tto someone more senior who does.

From a practical point of view it might be easiest to tell the joint tenant that the executors will pay the first installment and ask for reimbursement however the partner wants to pay it. The estate can then be discharged with the IHT as an ongoing liability on the joint tenant and the Revenue should then assess the remainder of the tax installments on the joint tenant.

I'm a member of STEP although this isn't my area. You could contact the advisor on the thread quoted above who had experience of getting the Revenue to assess the joint tenant and ask for advice - should be possible for them to give it in an hour or so so not a huge cost for the estate.

Thank you so much, that it super helpful! I really appreciate it. I’ll give them a call tomorrow. It’s all a very awkward situation as we worry about the partner and don’t want to put her under any unnecessary stress. Equally though, it does seem unfair (especially that our Dad wanted his half of the house to go to us but unfortunately the joint tenancy wasn’t set up properly).

Spoke to HMRC and they once again confirmed that as far as they’re concerned, the estate is liable (so the daughters) and it is down to us to get a reimbursement from the property owner. So we’ll pay the first instalment of the 10 and hopefully we can work something out after that. We have found a solicitor to help us.

I don’t understand much of inheritance laws. Big surely if the 50% of the house was left to the survivor partner, that 50% is still counted for inheritance tax reasons along with the money?

Yes that’s right. Both the house and money are counted.

So then surely the partner and you and your sibling will all be equally liable for the IHT, not just you and your sibling?

Apparently not! The HMRC only sees the administrators of the estate as liable. Down to us to come up with a private arrangement with the partner. Just very awks though!