Inheritance tax property split

A property was solely owned by a mother who had then put her property into tenants in common to herself and all four of her sons.

only three sons were registered on the title along with the mother as the maximum you can have is 4. The other son was mentioned on the TR1 but not on the title.

For the purposes of Inheritance Tax do i value our clients share as 1/4 in the property as per the title deed or 1/5 as intended when she severed her sole tenancy and transferred into Tennants in common.

To add further, the Intention was to have 5 owners as per the executed transfer (TR1)

Kindly let me know.


Law Lane Solicitors

I take it the client is the mother (implied but not actually stated).

The fact that there are only 4 trustees of land on the legal title does not affect the beneficial interest. If the mother gifted four-fifths equally between her 4 sons, then her beneficial interest is one-fifth, which should be reflected on the HT forms.

However, did all 4 sons occupy the property with her at the time of her death? If not then you need to consider the extent to which there is also a reservation of benefit. If, say, only 2 of the sons were living in the property when she died, her estate will include not just her beneficial interest in a one-fifth share, but also a GWR. I believe the GWR would be two-fifths, being the shares of the sons who are not living there, as she would have a GWR of each of their beneficial interests.

The above is on the basis that any of the sons who are living with her are making appropriate contributions to the household expenses (including repair and maintenance). If they are not, then the extent of the GWR would need to be reviewed.

Paul Saunders FCIB TEP

Independent Trust Consultant

Providing support and advice to fellow professionals

all the sons lived at different properties

In which case, the mother had a one-fifth beneficial interest in the property and a GWR in the other four-fifths for IHT purposes.

Paul Saunders FCIB TEP

Independent Trust Consultant

Providing support and advice to fellow professionals

1 Like

Thank you paul.

Furthermore, for box 16 of the Inheritance tax form 400- asks regarding power of attorney, if the deceased was subject to a court of protection order then would this box be checked yes or no