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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15940
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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My partner and I are unmarried and we each put equal portions

Customer Question

My partner and I are unmarried and we each put equal portions into buying our house. We hold the ownership of the house as Joint tenants. Apparently when either of us dies, the house becomes the sole property of the surviving partner. What are the implications of this for inheritance tax. Is the whole of the value of the house used in the calculation of the estate of the deceased partner? He is still married and his wife is his business partner.
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.

Hi.

Whilst under the rules of joint tenancy, you each own the whole property and if one of you dies, the whole property becomes the property of the surviving joint tenant, for Inheritance Tax purposes, only the half-share value of the deceased partner would be included in their estate.

Take a look at the article here which highlights some of the problems unmarried couples face. The surviving spouse may be forced to sell the property to pay an IHT liability so it may be worth considering life assurance. You each have a nil-rate IHT band of £325,000 before IHT kicks in at 40% of the excess.

I hope this helps but let me know if you have any further questions.

Expert:  TonyTax replied 2 years ago.
Hi again.

It's been a few days since I answered your question. Is there anything you need further clarification on?