Household goods - joint and sole

[taxpayer99]

My wife died back in November 2017 and I am trying to complete IHT400 for the end of May.

One thing I have been unable to find is a good definition of what constitutes my wifes sole possessions (for IHT407) and what are joint (for IHT404).

I did ask the IHT helpline about this and they seem to suggest it was open to interpretation e.g. "some husbands do not include their wifes engagement ring as sole possession"

i.e. they can argue the husband bought item, but hang on it was given so then belongs to the wife

My wifes clothes for example - all paid for out of the joint account - does that make them a jointly owned possesion even though they are very personal her.

Annoyingly it seems like I have to get jointly owned items valued - the contents of my marital home of 24 years - only to spouse exempt them in the next box on IHT404.

Does anyone have any clear guidelines?

[maths]

If husband and wife for example had a joint bank account in the absence of specific provisions/conditions attached to the account on the death of one spouse only 50% of the account is included in the estate of the deceased spouse.I assume the common position where either spouse my withdraw funds without the need for permission/signature of the other.

If W withdraws monies and purchases clothes for herself then she owns the clothes (ie they are not jointly owned).

If H withdraws monies and purchases, say, a birthday gift for W then the gifted property is that of W alone.

If H and W agree to buy, for example, an antique painting to be hung on the wall of their home for both to enjoy this would be a joint asset.

[taxpayer99]

That is very helpful thank you.

The joint account in this case is held as joint in the sense that on the death of W then H inherits with no IHT due as it passes by suvivorship.

The same is not true of items bought from the joint account then.

[maths]

If W extracts funds and buys a dress then she would need to leave her dress under her will. Passing on survivorship only apples if an asset is held as joint tenants (as is the case with a bank account).

[taxpayer99]

Can I post another example just to clear things in my mind.....

We decided to buy a car from the joint account.

I made the purchase.

My wife was registered as keeper with DVLA (which I understand is not the same as owner).

The invoice states that the car was bought by me.

Possibly I could argue the car was mine and I left her drive it.

Probably should follow your advice and say its joint property.

Does it pass by survivorship or could a spouse exception claimed to remove it from the chargeable estate?

[maths]

I think, with respect, that you may be overthinking the issues.

For IHT, assets which pass automatically by survivorship (eg house jointly owned) from one spouse to the other are exempt from IHT; in addition, assets left by the will of one spouse to the surviving spouse.

Re the car, it would be safe to assume it was a joint purchase.

[taxpayer99]

You are probably right about overthinking.

I'm still left with one question - but this then is a question of the will rather than tax so perhaps not appropriate here.

In this case the will does not leave anything to me her husband but only mentions leaving chattels free of tax according to any written note of wishes (which there isn't) and then at discretion of the executors.

Does the jointly only owned car fall to me or become subject to the will