Joint ownership iht query

[Murphyleo0832]

Hi all

New to this forum, so apologies if this topic has been discussed before.

My mother and I bought our council property in 1995. Leasehold. We lived in it as council tax tenants since 1985; it was my childhood home. When bought in 1995, it was bought as joint ownership between the two of us. I lived in it until 1999, and then moved away for work. She and I own no other property. She moved out the property in 2007, and we have let the property out since. She has been very generous and all property income from the flat since 2007 has come to me, on which I have paid tax. Flat worth about £700k. We have never charged each other rent when only one of us living in the flat. When bought it was to live in it, not a buy to let. In her will she has left the flat to me, but as joint ownership I think the flat would automatically transfer to me at her death. I was just wondering if there are any iht blind spots that might be around the corner that I may not predict, or whether I may be free from paying iht on her part of the property when she dies.

Thanks in advance .

[maths]

Your mum's interest would only pass to you on her death automatically only if you hold the property as joint beneficial tenants.

If the property is held as beneficial tenants in common she would need to leave her interest in her will ie no automatic inheritance.

If the property is worth 700k her interest is in principle worth 350k. The IHT nil rate band is 325k and there is a resident nil rate band of 100k currently (or possibly 200k if her husband left his estate only to her if he has died).

Therefore IHT arises on her estate if it exceeds 425k (or 525k) currently.

[Murphyleo0832]

Thanks for the reply.

I was a little concerned that because I moved out of our joint tenancy leasehold about a decade before my mother, there would be a weird rule that means my mother's share of the flat suddenly increases hence pushing my mother's estate into the iht threshold. for e.g. I thought that maybe In order for the flat's 50% belonging to my mother to pass to me at death I would have to have continued to pay my fair share of bills despite me not living there when my mother lived there, etc. Or that she would have to have paid me rent when I was not there.

My parents divorced when I was a child, so he does not factor in this at all.

Thanks again.