Commentary

I3.214 The value of joint property for IHT

IHT, trusts and estates

I3.214 The value of joint property for IHT

I3.214 The value of joint property for IHT

A joint interest (whether held as joint tenants or tenants in common) in property comes within the definition of property1. The value of such an interest, valued on its own, will often be less than the relevant proportion of the value of the whole (see I8.378). Where property is transferred into joint names by way of gift, the fact that the aggregate value of the respective shares of the property might be less than the value of the property as a whole could give rise to a transfer of value in excess of the value of the property taken by the donee, under the 'loss to the donor' rule2.

Example

A owns a house valued at £400,000.

A transfers the house into the joint names of himself and his son.

The value of the interest of each of them after the transfer is £190,000 (this reduction reflects the difficulty a joint owner has in selling their share).

£
Before the gift, A's estate includes the house valued at400,000
After the gift he is left with a severable share valued at190,000
Value transferred by the transfer of value£210,000

Transfers between spouses or civil partners

The exemption for transfers between spouses (or civil partners)3 (see I4.225) means that the special rules governing the property rights of spouses have to be considered in relation to their jointly owned property only when someone transfers his share to someone other than the spouse, or where one but not

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