Q&As

Who pays inheritance tax on joint property passing by survivorship?

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Published on LexisPSL on 27/11/2018

The following Private Client Q&A provides comprehensive and up to date legal information covering:

  • Who pays inheritance tax on joint property passing by survivorship?
  • Burden of IHT versus liability for IHT
  • Burden of IHT on joint property
  • Liability for paying IHT on joint property
  • Right of recovery

Who pays inheritance tax on joint property passing by survivorship?

This question may have particular significance where a valuable asset (such as a house) passes by survivorship to a surviving joint tenant and the residuary estate is not particularly valuable. Assuming none of the transfers of value on death are exempt or relieved, it will be important to establish who bears the inheritance tax (IHT) in respect of the jointly owned property (joint property forming part of the deceased’s estate for the purposes of calculating IHT payable). This Q&A focuses on the burden and liability of IHT on a transfer of value on death.

Burden of IHT versus liability for IHT

It is important to bear in mind the distinction between the burden of IHT and the liability for IHT.

The burden (sometimes referred to as the incidence of IHT) concerns who ultimately bears the burden of the tax. This may or may not be the same person who has a liability to pay the IHT due.

If a person is liable for IHT, they must account to HMRC for the tax due regardless of whether they ultimately bear the burden of the tax charged. Liability is therefore concerned with who HMRC may pursue for payment of IHT.

Burden of IHT on joint property

This is dealt with in section 211 of the Inheritance Tax Act 1984 (IHTA 1984).

IHTA 1984, s

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