Inheritance tax advice - Help

[HowlingGale]

Hello any financial whizzes here who can give me a bit of advice?
I am divorced, amicably, but my ex and I have yet to agree (or even consider) separating our finances. I am living in the family home (our main asset) with my youngest son, while my ex has moved out and lives with his new partner.

We still own the house jointly but I suddenly had a bit of a panic the other day when it occurred to me that a) in the event of our untimely demises, that our sons could probably not afford the mortgage payments and would be forced to sell the house, assuming of course, that the lender would let them take over the loan, which they probably wouldn't. And secondly, there's the issue of inheritance tax - I understand that each person has a £325k allowance, plus an additional £175k for their house, coming to £500k. But as my ex husband also owns half the property does that mean that his allowance would also taken into consideration? If not, then how best to legitimately minimise the inheritance tax liability. I know this is very much first world problems, but something I need to get sorted out sooner rather than later. It's ridiculous that I don't have a will and I'm almost 57!! Talk about denial......Anyway, if anyone had a bit of sage advice, that would be most helpful!

Life insurance to cover the outstanding mortgage balance would be a straightforward solution if it's affordable.

Would need more information about your house and other assets/liabilities to be able to comment sensibly on your IHT position.

There are several implications to consider and it’s definitely worth getting advice. Jointly held assets pass to the survivor provided they survive by at least 28 days. As you are no longer married this transfer will not be outside the scope of IHT.
If the property passes to your ex-husband it may end up with his next wife.

Thank you both. I have made an appointment to see an independent financial advisor and a lawyer.
I was under the impression that if I died intestate that my share of the house would go to my children, not to my ex husband, so thanks for alerting me to that Forensic!

If you are joint owners the house will go to him (and the other way too). If you are tenants in common (unlikely) then you each own a specific share.
Get your financial settlement done because no matter what you put in your will your ex gets the house .

You can sever a joint tenancy. See some useful advice [[https://www.divorcefinancetoolkit.co.uk/2012/01/notice-of-severance-of-joint-tenancy-in-divorce/ here]]. See a lawyer and make a will and sever your joint tenancy asap.

Thanks for that Midlife and MyCat. However, I can't just unilaterally sever the joint tenancy as he does own half the house. Unfortunately I can't afford to buy him out, but on the other hand neither of us are in any great hurry to do anything, (ie sell the house), other than clarify our respective positions and get a will written up.

Severing the joint tenancy can indeed be done unilaterally, it does not require agreement. You would then both still own half the property as before but, instead of you half going to the other in the event of your death, you would be free to will your half to whomsoever you choose.

Sounds as if that is the outcome you were expecting.

Thanks for clarifying that Finally, I stand corrected! I will do that as a matter of priority.

Ooops, forgot to pass on a brilliant recommendation I first picked up from MN, @Mumblechum0 of this parish who did our also slightly complicated wills and made the whole process very easy.

We emailed our 'facts' and desires, had a really good discussion by phone and then received draft wills by email. We arranged signatures ourselves but could have visited their offices for signatures and witnesses.

All very helpful, covering scenarios we had not previously considered and very convenient.

https://www.marlowwills.co.uk

Hi Finally, thanks v much for the recommendation, much appreciated. I shall get onto it pronto!