I am aware that HMRC will allow a 10-15% discount for jointly owned property but this is not allowed under the related property rules for spouses. However, what is the position where the posies are separated but haven’t initiated or finalised (in this instance for 10+years!). I cannot find any information on HMRC’s manual particularly the IHTM09731 - Related property: introduction.
The related property rules in s161 IHTA apply only to spouses and civil partners (and to property held or formerly held in a charitable trust made by any of these). Though it never uses the word “spouse” same sex couples are included: Marriage (Same Sex Couples) Act 2013 para 1(3) Sch 3.
Separated spouses are not mentioned in IHTA so they remain spouses for s161. But cohabitants are not included. So the discount for separated spouses jointly owning not living together in the same house is 10%.
Jack Harper
Thank you, this is very helpful.