Appointing a Professional as an Executor

Flugelhorn

there is an IHT allowance for a property being passed to nearest and dearest - gives a couple 500K allowance each  so if both have died and leave the house and some funds to children - then one million is exempt 

RAS

Whilst you are unmarried, I believe that you'd get the £325k personal allowance, plus up to £175k for the residential allowance if the property is passed to a descendant.

Once you enter a civil partnership or marriage, the spousal exemption applies. There is no IHT on transfers to the spouse but on the second death, the allowance is (£325k +£175k) x2 as long as a) the property is valued above £350k and b) the property goes to descendants. It is common to sever the tenancy on the property and leave one portion to the child(ren) on the first death with an Immediate Post Death Interest Trust allowing the partner/spouse to live there and protecting half the value of the house. 

If you leave assets directly to your son and die first then the £1m allowance is similarly reduced. Depends if you think junior would benefit from an early financial boost whilst not impoverishing your partner. But if you leave part of the house to junior without the IPDI trust, you cause all sorts of problems for him, loss of first time buyer status, additional SDLT taxes on any other house he buys and CGT on the disposal of the house after the second spouse dies. 

You really need to read the HMRC website guides, maybe ask a few questions here and then get an appointment with someone who understands not only IHT but also SDLT and CGT.

RHemmings

RAS said:

Whilst you are unmarried, I believe that you'd get the £325k personal allowance, plus up to £175k for the residential allowance if the property is passed to a descendant.

Once you enter a civil partnership or marriage, the spousal exemption applies. There is no IHT on transfers to the spouse but on the second death, the allowance is (£325k +£175k) x2 as long as a) the property is valued above £350k and b) the property goes to descendants. It is common to sever the tenancy on the property and leave one portion to the child(ren) on the first death with an Immediate Post Death Interest Trust allowing the partner/spouse to live there and protecting half the value of the house. 

If you leave assets directly to your son and die first then the £1m allowance is similarly reduced. Depends if you think junior would benefit from an early financial boost whilst not impoverishing your partner. But if you leave part of the house to junior without the IPDI trust, you cause all sorts of problems for him, loss of first time buyer status, additional SDLT taxes on any other house he buys and CGT on the disposal of the house after the second spouse dies. 

You really need to read the HMRC website guides, maybe ask a few questions here and then get an appointment with someone who understands not only IHT but also SDLT and CGT.

Yes, I agree with all of this.