Inheritance tax

[phoenixxx]

Does anyone know of a way to avoid paying inheritance tax? My partner and I have lived together, and have a 20 year old daughter, but the house is in his name only. We have both made wills leaving everything to the other but I will have to pay Inheritance tax in the event of his death because the house will be worth more than the limit. I know one solution is to get married but does anyone know of any other way?

[Ethel]

Yes - get your name put on the deeds.

[hippyhoppy]

If you sign it over to your daughter doesn't that have a seven year window on any tax payable if anything hideous should happen?

[dzug]

Putting the house in joint names will at least defer (or reduce) the problem until the second death.

[bednobs]

if there as an easy way to avoid inheritance tax then everyone would be doing it

[sissimarissa]

Do as dzug advises - alter your Register at the Land Registry so that the property is in joint names. All three of you can be named. Upon the first and second deaths the property passes to the survivor(s) automatically without taxes, probate, etc. Only on the third death would tax be payable, and who knows whether the wretched IHT will still exist then?

[PrinceRainie]

If you placed the property in your daughters name, it would create a Gift with reservation, therefore, not keeping the house out of your estate. Unless you pay the full market rent for the property (assuming you remain living in the house) then it will not fall out of your estate, therefore pointless putting it in your daughters name.
The loopholes we could exploit for IHT have been tightened, so woudl strongly recommend you speak to a solicitor for poper legal advice

[dzug]

Upon the first and second deaths the property passes to the survivor(s) automatically without taxes, probate, etc.

Without probate, maybe, but if the deceased's share is large enough, not without taxes.

And giving it to your daughter, as well as having the disadvantages already mentioned, could land her with a CGT bill to replace the IHT bill.....

[sense4all]

I am not sure of the legal phrase, it used to be something jaunty like tennant in kind ( not the same as joint ownership) if that is still do-able see if it is more appropriate as you used to both get an IHT allowance that way. Perhaps one of the leagal eagles will be able to say if it's a current option to persue. Just a thought trawlwd the web and found this :

http://www.first-property-partners.com/jointow nership.php?page=2

[EverClean]

Seek professional advice. The main way in which this is bypassed is through "in trust" whole of life assurance that would effectively pay the tax liability in the evnt of either of you dying - but it's usually a fairly expensive premium.