Wills, Jointure and CGT

[Peter Pedant]

yes Boys and Gurlz
usually it is a question of: I am not insured - will I have to pay.

But listen to this question

If a house is owned jointly by A and B who are not otherwise related ie not man and wife (or partnership thingey). A dies and B gets the house automatically and not as a result of being left it by will

what is the tax position with respect to IHT and CGT ?

There has to be a tax charge soemwhere or else we would all make over our houses to joint owners who are unrelated.

[Fay Mousse]

It depends on how it is owned - joint tenancy or tenancy in common.

If it is a joint tenancy each person owns all the property and that doesn't disappear when the other party dies. So there is no tax to pay,

The question is - why would anyone want to do this? They can't leave their 'share' to whoever they like.

[Peter Pedant]

erm The jointure was a joint tenancy and not a tenancy in common.

and no I dont know why two people who were not married had a jointly owned house. I am aware a commonalty is devisable - if you are tenants in common, you can leave it by will.

[dzug]

There is IHT payable - on 50% of the value of the property (subject to the nil rate band of course) - this is true whatever the type of tenancy. (assuming two owners with no other split defined).

Joint tenancy determines who gets the property - not the tax payable.

[Peter Pedant]

Thank you dzug

I KNEW there was a reason why we didnt enter jointures with complete strangers.

[dzug]

There's an even better reason - they would have the right to live in the house as well as you and could probably force a sale if they wanted out.