tenants in common to joint tenants

bumpergirl

My children are going to reverse their recent decision to change to tenants in common. they now  see the pitfalls re CGT and using up NRB on first death.  On the form you have to state why you are changing your minds - has anyone experienced this    -   is there going to be a problem?

Keep_pedalling

They should really look at their wills not changing ownership. The standard approach is that their wills create an immediate post death interest trust on the first death. This puts the legal ownership of deceased spouses share in trust but the beneficial ownership is with the surviving spouse. This does not use any of the transferable NRBs as it is still covered by spousal exemption, and does not create a CGT liability for the eventual beneficiaries either.

This protects both the security of the surviving spouse and the eventually beneficiaries (remaindermen) in the event of the surviving spouse remarrying and care costs although hopefully the survivor will have enough assets to self fund as long as they need without having to rely on cash strapped LAs.

bumpergirl

thanks for your reply KP - do you mean they should each change their Will to leave everything to each other in trust for life with children eventually inheriting??

Keep_pedalling

bumpergirl said:

thanks for your reply KP - do you mean they should each change their Will to leave everything to each other in trust for life with children eventually inheriting??

Well I don’t know what their current will say, but if they have both left half the house to their children absolutely then that is a rather bad idea for several  reasons. If there is no cause in the wills giving the surviving spouse a life interest then they definitely need new ones, and ones drawn up by a solicitor not DIY or an unregulated will writing company. 

Emmia

bumpergirl said:

My children are going to reverse their recent decision to change to tenants in common. they now  see the pitfalls re CGT and using up NRB on first death.  On the form you have to state why you are changing your minds - has anyone experienced this    -   is there going to be a problem?

Are you talking about siblings or siblings plus their respective spouses/partners?

The position on IHT is different depending on if they're married (which would be illegal for siblings).

bumpergirl

Emmia said:

bumpergirl said:

My children are going to reverse their recent decision to change to tenants in common. they now  see the pitfalls re CGT and using up NRB on first death.  On the form you have to state why you are changing your minds - has anyone experienced this    -   is there going to be a problem?

Are you talking about siblings or siblings plus their respective spouses/partners?

The position on IHT is different depending on if they're married (which would be illegal for siblings).

sorry - should have said 'son and his wife'

bumpergirl

another thought could be to keep tenants in common and simply make a new will leaving everything to spouse, which overrides everything.  Is that possible?

Keep_pedalling

bumpergirl said:

another thought could be to keep tenants in common and simply make a new will leaving everything to spouse, which overrides everything.  Is that possible?

Yes it is.