Nil rate band - Tenants in common

Hectorhec

Hi all, just a quick question I'm hoping someone will know the answer to, as I haven't been able to find it anywhere else yet.

If I am a tenant in common with my partner (not married) and if my share of the home is left to my children in my will, would that amount be included within the nil rate band for inheritance tax purposes?

HappyHarry

Not sure what exactly you’re asking.

Your estate will have a £325,000 nil rate band and as you are leaving (part of) your main residence directly to your children then your estate could also benefit from up to £175,000 from the residence nil rate band.  Your assets, including your share of the house, will be valued at time of  death and the relevant nil rate bands applied to them. Any excess will attract inheritance tax. 

Leaving part of your property directly to your children would be unusual - it puts your partner at risk should they and your children ever fall out, or if any of your children die or get divorced then their share of the property may pass to others who may not have your partner’s best interests at the top of their priority lists.

I would hope that you are speaking with a solicitor about this scenario and not drawing up your own Will?

Keep_pedalling

What is your total net worth and how much is the house worth?

There are big IHT advantages for married couples or couples in civil partnerships. Even if your estate would pay no IHT if you died first there are still tax advantages for MC and CP, as you can make use of an immediate post-death interest trust that not only provides security for the surviving partner and your children it also avoids a CGT liability on the second death..