Inheritance tax on jointly owned property depends on how the property is owned:
- Joint tenants: If the property is owned as joint tenants, the deceased’s share passes automatically to the surviving owner(s), and the value of the deceased’s share is included in their estate for IHT purposes.
- Tenants in common: If the property is owned as tenants in common, the deceased’s share does not pass automatically to the other owner(s) but according to their will. The value of their share is included in their estate for IHT purposes.
There is however no inheritance tax between spouses. It’s important to plan how jointly owned property will be handled in the context of inheritance tax to minimise your liability.