Joint tenants v Tenants in Common

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Ruth
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Joined: Mon Jan 30, 2006 6:31 pm

Joint tenants v Tenants in Common

Post by Ruth » Mon Mar 26, 2007 11:09 am

I wonder if somebody could help me here please. I ask this question on behalf of my father in law who is in his 80's and wants his affairs in order.
Currently, my in laws are joint tenants. They wish to change to tenants in common. This is a tax issue. They say a lot of their friends have made this change but after having previous poor advice from solicitors, they are in need of reassurance that this is the right thing to do.

Is it correct that in tenants in common, half the value of estate goes to trustees and other half stays with surviving partner which therefore reduces inheritance tax implications.

Any help would be much appreciated. Sorry if this has been brought up before. Many thanks. Ruth.

Conveyancer
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Post by Conveyancer » Mon Mar 26, 2007 1:32 pm

It is not possible to answer the question without having full details of your in-laws' estate and what they want to do with it. They should consult an accountant or a lawyer who specialises in wills and tax planning if their estate is over £300,000.

For basic info on inheritance tax see here:

http://www.direct.gov.uk/en/MoneyTaxAnd ... DG_4016736
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Ruth
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Post by Ruth » Mon Mar 26, 2007 2:20 pm

Conveyancer thank you. I will pass the details onto my inlaws. I would like to thank you for your support in these forums. Yourself and others helped me so much during my saga (harassment/trespass/decking) Remember - we won.

I think my inlaws know what they want to do but they have had poor advice previously and now want to get it right. They are talking purely inheritance tax - they are not millionnaires but house price has gone through the roof.

gardenlaw
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Post by gardenlaw » Tue Mar 27, 2007 8:27 am

You could find a specialist solicitor on www.solicitorsfortheelderly.com

Mandy
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Please go to a tax specialist

Post by Mandy » Mon Apr 02, 2007 2:48 pm

I am an chartered accountant and trying to remove part of your family home from the estate for inheritance tax is very difficult if like most people you don't have much else in the way of assets, but house prices have drawn you into inheritance tax.

First you do need to make the property severable - hence the need to reregister as tenants in common rather than the usual joint tenants and you can do this easily and cheaply yourself direct with the Land Registry. However presumably the surviving spouse wishes to continue to live in the property - and hence even on the first death half the property can't be legally freely given away to another party. Added to this, good old Gordon rejigged the tax rules last year to make most trusts more expensive to set up by charging tax on setting them up, tax on having them if they are more than 10 yrs old, and tax on taking assets out of trust again.

To make sure you are talking to a specialist in this area, I would recommend that you go to an accountant/tax adviser or solicitor that is a member of STEP (the Society of Trust and Estate Practitioners) as they will have experience in these areas (they have to already have experience of trusts to join). You can find one via:
http://www.step.org/searchuser.pl?n=1000

You can also find some options on taxationweb at:
http://articles.taxationweb.co.uk/index.php?id=28

Good luck - and remember to compare the cost of any potential inheritance tax payable against the costs of any tax planning in terms of fees as well as tax.

despair
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Post by despair » Mon Apr 02, 2007 7:15 pm

as I understand it

A nil rate band loan Trust between husband and wife is the only trust left without restrictions
being placed on it by "dear gordon"
this can be done by any trust solicitor

Do be careful to use the Trusts section of a large solicitor firm not just your local bod

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