What is the position with regard to the IHT liability where property is owned as joint tenants and the spousal exemption does not apply

Trusts Discussion
1

Who is liable to pay the IHT on jointly owned property, where there is no spousal exemption?

Elizabeth Mullaney
Gaby Hardwicke

2

Section 200(1) © IHTA applies- in the case of a beneficial joint tenancy it will be the surviving co-owner.

Tim Gibbons

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3

Where such property passes by survivorship to the co-owner(s), they will need to submit the appropriate IHT forms and pay the IHT.

Whilst there are occasions where the deceased co-owner’s will may direct that all IHT payable as a result of their death is payable out of the estate, that merely creates a general legacy in favour of the surviving co-owner(s) and does not absolve them from their statutory obligations.

Paul Saunders

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4

In such circumstances the person(s) receiving the property by survivorship must pay the inheritance tax. This is as it must be, because it is quite possible to have an estate where the only assets are owned as joint tenants and pass in this way.

From IHTA 1984 s.200©

The persons liable for the tax on the value transferred by a chargeable transfer made (under section 4 above) on the death of any person are… so far as the tax is attributable to the value of any property, any person in whom the property is vested (whether beneficially or otherwise) at any time after the death, or who at any such time is beneficially entitled to an interest in possession in the property;

Taurean Drayak
Elliot, Bond & Banbury

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5

The problem for the executors will be ensuring it is paid. If not, I believe they could be liable

Simon Northcott