Property in joint names

Biggles

My daughter and I are planning to Buy To Let. We can pay cash, 50% each.

It occurs to me that the simplest way of holding the property is Tenants In Common then, when I die, 50% stays with Daughter and 50% goes into my estate.

But it also occurs to me that, if we were to hold it as Joint Tenants, then she would become the owner on my death, without the property becoming part of my estate, thus reducing the chances of paying IHT.

Obviously, it means a new will; it presently shares everything 50:50 between Son and Daughter, and it will need to be worded so that the Son's share of my estate is larger than my Daughter's to the tune of 50% of the value of the property.

Does all that make sense? Have I got it right, or have I missed something?

Errata

Joint Tenants: What happens if for some unseen reason one of you wants to sell and the other one doesn't?

Savvy_Sue

I'd say this was an area where you needed to get decent (ie pay for it) legal advice on all the ramifications, especially the one mentioned by Errata, bearing in mind that if either of you needs to claim anything means tested then ownership of half a house and related income will push you over the limits. Which is fine, as long as you can actually access the 'value' if required!

Biggles

Errata wrote: »

Joint Tenants: What happens if for some unseen reason one of you wants to sell and the other one doesn't?

That would just be something we'd have to arrange between us. But I guess it would be the same if we owned as Tenants In Common too.

Savvy_Sue wrote: »

if either of you needs to claim anything means tested

That's very unlikely to ever be an issue.

britannia6

Biggles wrote: »

But it also occurs to me that, if we were to hold it as Joint Tenants, then she would become the owner on my death, without the property becoming part of my estate, thus reducing the chances of paying IHT.

Inheritance Tax is still payable on assets that pass by survivorship so holding the property as Joint Tenants would not save you any Inheritance Tax.

Biggles

britannia6 wrote: »

Inheritance Tax is still payable on assets that pass by survivorship so holding the property as Joint Tenants would not save you any Inheritance Tax.

Ah! I guess I was thinking of the spouse exemption.

Curses, foiled again! Back to the drawing board......

Mrs_Money

Biggles wrote: »

My daughter and I are planning to Buy To Let. We can pay cash, 50% each.

It occurs to me that the simplest way of holding the property is Tenants In Common then, when I die, 50% stays with Daughter and 50% goes into my estate.

But it also occurs to me that, if we were to hold it as Joint Tenants, then she would become the owner on my death, without the property becoming part of my estate, thus reducing the chances of paying IHT.

Obviously, it means a new will; it presently shares everything 50:50 between Son and Daughter, and it will need to be worded so that the Son's share of my estate is larger than my Daughter's to the tune of 50% of the value of the property.

Does all that make sense? Have I got it right, or have I missed something?

You may have missed something- if ( long way down the road!) you need to pay for your care and don't have enough cash, the Local Authority will have a call on your 50% of the property. They can't make your daughter sell it, but when it is eventually sold the land registry informs them and they get what they are owed .
Just a thought...

John_Pierpoint

Does daughter live in the house with you?

Biggles

Mrs_Money wrote: »

You may have missed something- if ( long way down the road!) you need to pay for your care and don't have enough cash, the Local Authority will have a call on your 50% of the property. They can't make your daughter sell it, but when it is eventually sold the land registry informs them and they get what they are owed.

Cheers for that thought. But I wouldn't be involving the LA, I'd be self-funding throughout ;-)

Biggles

John_Pierpoint wrote: »

Does daughter live in the house with you?

You mean my existing home? No.

John_Pierpoint

I think we would need to do a full fact find of both you and your daughter's net wealth to be able to comment further.