Inheritance tax and home ownership

Wobble101

My husband is not named on our home deeds - I am the sole owner, now with no mortgage. In our wills we leave everything to one another. We are in our 60s and he has an illness which is not yet debilitating but will become so. 

Before his diagnosis, a lawyer had suggested that we get his name added to the house deeds (as joint tenants), on the grounds that if I died first it would make his life a little easier (I think in terms of being able to sell more quickly than would be possible otherwise).

But we’d like to be clear about any downsides too, and one I’d wondered about relates to inheritance tax. Put simply, if he dies first are there any pros and cons of him being a joint owner of our home in terms of inheritance tax? We have one child. My husband has few assets while I have a lot as a result of a recent inheritance. 

My basic understanding is that his unused IHT allowances would pass to me in his death - but I’m struggling to understand whether his being joint owner of our home makes a material difference to this. 

Thank you. 

Keep_pedalling

It actually makes no difference because as a married couple everything you inherit from a spouse is covered by spousal exemption. What it will avoid if you die first is the need to apply for probate In order to transfer ownership of your home.

Do you have children?

Wobble101

Thanks @Keep_pedalling. Yes, we have an adult child (at university). 

Keep_pedalling

Wobble101 said:

Thanks @Keep_pedalling. Yes, we have an adult child (at university). 

Are they an executor of your wills? If not worth adding them as a joint or back up executor. If you don’t have LPAs in place, that should also be on your urgent to do list as well and again your child can be one of the attorneys.

Jacklob

At the moment as the husband is not on the deeds he does not qualify for the “residential nil rate band £175000) so if he dies first this cannot be inherited. So upon the second death it can,t be used. I have just put my husband on our deeds for this very reason as otherwise there will be a IHT liability upon second death. This is a benefit if either die first. Unless I misunderstand this.