Inheritance tax property

BillyGreens

I have a 10 propertys in the UK and my brothers also partners with me if I die Is there a tax paid by my brothers for Inheritance tax

MrsManda

It's worth posting your question on the Cutting Tax board but I think:

If he jointly owns each property (for example he's on the deeds alongside you) then when you die the whole property will revert to him with no inheritance tax as he'll already own it - unless you will your half to someone else.

I think it also depends on how much your total estate is worth

http://www.hmrc.gov.uk/inheritancetax/intro/basics.htm

CLAPTON

how much is the total property portfolio worth approx
is the owner joint tenants or tenants in common
what over value will you leave
do you have a will and if so who do you leave your estate too
who is your nearest legal heir (wife, children, parent, siblings etc )

John_Pierpoint

How old are you?

Have you any reason to think you might be dying within (say) 10 years?

How many "brothers" ?

no inheritance tax as he'll already own it.......Oh were it that simple.

I'm a little surprised that you (plural) have managed to acquire this size of property portfolio without a solicitor wanting to explain ALL the complex ins and outs of property ownership and taxation.

Who would you like to inherit your share of this portfolio assuming "the brothers" have the "freehold" (or is it leasehold?) registered in their names? Would you expect this beneficiary to find the payment of tax (if any) that becomes due on your death?

What is the gross & net value of these properties (ie after deducting mortgages and any other outstanding liabilities)?
Is there any sort of (say) life insurance to pay of your share of such debts when you die?
How much did you pay for them ?

Can we assume that you live in the UK and pay UK income tax and submit an annual self assessment tax return so that the UK tax man can see if you owe any income tax as a result of owning (part of) these 10 properties ?

taxing

MrsManda wrote: »

It's worth posting your question on the Cutting Tax board but I think:

If he jointly owns each property (for example he's on the deeds alongside you) then when you die the whole property will revert to him with no inheritance tax as he'll already own it - unless you will your half to someone else.

I think it also depends on how much your total estate is worth

http://www.hmrc.gov.uk/inheritancetax/intro/basics.htm

Hi

Where legal partners (married/civil partnership) have an 'undivided share' (generally known as joint ownership) then legally, the other half, on death, reverts to that joint owner and, (and only because) as the legal partner inherits the value is covered by the legal partner tax exemption.

In all other cases, with jointly owned property, this only (pre)determines who inherits - the half share (discounted) will still be counted in the deceased's estate on death when calculating if Inheritance Tax (IHT)is due (or not).

That property's value in the death estate will be reduced by any loan/mortgage attaching to it.

If IHT is due then, and unless you say different in your will (you DO have a will, don't you!) then that IHT will be suffered by your 'residuary' beneficiary (that is the person you have left everything else to...maybe your own legal partner?).

You can say in your will, that your brother should pay the IHT on the half share he inherits.

However, you can also change the (legal) way in which you own the property (if you haven't already). If you make a (legal) declaration that the property is to be held as tenants in common (that mean's you each have a a clearly 'marked share - which may be 50%), then you can leave that share, in your will, to anyone you choose (maybe your legal partner, when it would be exempt from IHT - as explained above). Again, any loan you had over that property, would attach to it in your death estate.

If you did choose to leave the half share (held as tenents in common) to your legal partner, then, and if it was practical, you would have the property loan(s) secured on properties which weren't going to be inherited by your legal partner. You will appreciate that if the loan is deducted from an already IHT exempt asset, then it doesn't help to reduce the final IHT bill - better the loan(s) is deducted from IHT chargeable assets thus reducing the IHT bill.

Your tax affairs are 'complicated' by this property ownership and you would benefit from proper professional help to make sure you are not exposing yourself, or your family to unexpected (and probably unnecessary) high tax bills.

John_Pierpoint

"If by now you are not completely confused, you have obviously not begun to understand the situation":D:eek::D