Joint ownership of property - IHT Liable?

[House]

My brother and I jointly own (“joint tenant”) two houses, both with hefty mortgages. We live together in one house, the other is rented out. I believe that under rules of survivorship if either of us passed away the other would automatically become the owner of both properties. However, would this incur inheritance tax or would the survivor acquire the two houses exempt of any inheritance tax liability?

If we create a trust, with the two of us as trustees and our children as beneficiaries, would any tax need to be paid for transferring the two houses into the trust. Are there other tax liabilities to consider here?

Andy

[downtowner]

Hi Andy
I am not a tax expert but i am in a position of being 50% beneficial owner of a number of properties (with my brother). The properties are in a 'Trust' wich was simple and not costly.
I was not aware of any tax on creating the Trust
given that the beneficiaries of the Trust were the beneficial owners before the Trust.

On the 'Inheritance' my understanding is that the 'Joint Tenancy' only effects the right to ownership. eg: A will can not direct the ownership
so the other joint tenant becomes the sole owner.
The IHT to be paid is still 50% of the value of the house. I hope i am wrong but i believe that because most joint tenants are also married the IHT is except.
You and Your brother are not married so the IHT
allowance does not apply so you are 'on the hook' for the value of 50% above the 255K threshold.

I hope some expert can clarify and correct me.
Also i would like advice on how to transfer
benefit over time to third parties like children/nephews etc.