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Sole owner of family home

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cherry76cherry76 Forumite
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Am asking on behalf of my friend.  She owes her house outright before she got married.  Her house is now worth nearly half a million and she has a young son.  She is a bit concerned whether her husband will be subject to IHT when she dies as he is not on the title deed.  She asked my advice whether she should add her husbad name as joint owner of the property to minimoze inheritance tax. I do not know what to say to her in case she divorces later on and the husband will owe half of her house.  My advice was for her to contact a solicitor but said I would ask on the forum.  It is a very delicate subject and demand of lot of thoughts.  Thanks

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  • edited 7 April at 1:58PM
    HappyHarryHappyHarry Forumite
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    edited 7 April at 1:58PM
    There is no inheritance tax due on an estate left to a UK domiciled spouse.

    This means that your friend could probably leave everything to her husband, and there would be no IHT to pay on her death.

    On the husband's death, providing everything was then left to the son, then IHT would be payable on any estate exceeding £1m.

    There would be no IHT saving by moving part of the property into the husband's name, unless her other assets are significant and she does not have a will..

    A word of warning - your friend needs to make sure she has a will and it is up to date. If she dies without a will, then the first £270,000 of her estate will go to her spouse, and the remaining estate will be split between her son and her spouse. This could mean that part of the house will belong to her son, and part to her husband in the event of her death. This is unlikely to be an ideal situation.
    I am an Independent Financial Adviser. Any comments I make here are intended for information / discussion only. Nothing I post here should be construed as advice. If you are looking for individual financial advice, please contact a local Independent Financial Adviser.
  • edited 7 April at 2:03PM
    p00hsticksp00hsticks Forumite
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    edited 7 April at 2:03PM
    I think the answer will depend partly on the value of what else is in her estate (savings, car, jewellery etc) and who she's actually left things to - has she made a will and if so, who is she leaving the house to ? If she hasn't made a will then it;s important that she does so as the laws of intestacy may not be what she wants to happen.
    I'm not an expert on divorce, but I'd say that regardless of whether the house is in just her name or in both of their names, it's an asset that I think would be on the table as part of any divorce settlement.

    But as you say, it;s really one for her to talk over with a solicitor, as part of the process of making a will if she doesn't have one.
  • edited 7 April at 2:11PM
    xylophonexylophone Forumite
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    edited 7 April at 2:11PM

    She could consider making a will leaving the property to their


    son but with an interest in possession to her
    husband.


    https://www.thewillbureau.co.uk/news/2018/6/29/what-is-an-immediate-post-death-interest





    https://techzone.adviserzone.com/anon/public/iht-est-plan/Tech-guide-iht-on-death


    A STEP solicitor would advise.


    https://content.step.org/step-directory
  • MarconMarcon Forumite
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    cherry76 said:
    Am asking on behalf of my friend.  She owes her house outright before she got married.  Her house is now worth nearly half a million and she has a young son.  She is a bit concerned whether her husband will be subject to IHT when she dies as he is not on the title deed.  She asked my advice whether she should add her husbad name as joint owner of the property to minimoze inheritance tax. 
    Why is it a delicate subject which demands any thought at all? Anything left to a spouse is not subject to IHT.

    cherry76 said:
    I do not know what to say to her in case she divorces later on and the husband will owe half of her house.  My advice was for her to contact a solicitor but said I would ask on the forum.  It is a very delicate subject and demand of lot of thoughts.  Thanks
    Better to say nothing when you aren't sure of your ground. Whether the husband is on the title deeds of the house or not might or might not impact on a possible divorce settlement.

    Why is your friend asking you when this obviously isn't your field? Your first thought was the best one: she gets proper advice from a solicitor, which is especially important because there is a young child involved whose guardianship arrangements need to be thought through (much more important and sensitive than any tax issues) in the event that both his parents die before he reaches majority.
  • cherry76cherry76 Forumite
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    There is no inheritance tax due on an estate left to a UK domiciled spouse.

    This means that your friend could probably leave everything to her husband, and there would be no IHT to pay on her death.

    On the husband's death, providing everything was then left to the son, then IHT would be payable on any estate exceeding £1m.

    There would be no IHT saving by moving part of the property into the husband's name, unless her other assets are significant and she does not have a will..

    A word of warning - your friend needs to make sure she has a will and it is up to date. If she dies without a will, then the first £270,000 of her estate will go to her spouse, and the remaining estate will be split between her son and her spouse. This could mean that part of the house will belong to her son, and part to her husband in the event of her death. This is unlikely to be an ideal situation.
    There is an updated mirror wills leaving everything to each other except her husband is not on the title deed. They have appointed guardianship and trustees if both die for the young son. Probate will be required for husband to remove her name and put his name on property deed. Her assets will be above the iht threshold. Can the husband still claim main residence allowance if the property has not been transferred in his sole name?  I thought if it was in joint names then only half of the property will be calculated.We were just talking about wills. Thank you for your advice she will probably seek the advice of a solicitor.
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