How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Sam Your Own Question
Sam, Accountant
Category: UK Tax
Satisfied Customers: 13572
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Capital Gains, CIS ask for Sam Tax
Type Your UK Tax Question Here...
Sam is online now
A new question is answered every 9 seconds

We are not married, both older, and have separate sets of children

This answer was rated:

We are not married, both older, and have separate sets of children who we both wish to inherit our separate estates.
We are thinking of buying a house as tenants in common with either a life interest or a right to remain. However we have heard that when one of us dies, if the surviving person remains in the house, their estate will be charged a nominal amount of tax as the surviving person would have had the benefit of half the house they did not own and did no pay rent on. Is this true and if so, what sort of amount of tax are we talking about. We can see problems for our two lots of children as they would have larger inheritance tax to pay.



Thanks for your question

As an unmarried couple you have two options as to the ownership of the property


1) Tenants in common

2) Joint Tenants


With the first - tenants in common - then you have the right to leave your "half" share of the property to whom you like, so children or your partner and make sure this is covered along with a declaration of trust, so do seek legal advise on this (with a solicitor who is familiar with property law) but it does protect the surviving partner from having to move and each of you own % of the property, and it also protects you from having to sell should either of you need to go into a care home.

The declaration of trust in essence ensures that the surviving partner is "lent" the half share for a set period of time. This also can avoid Inheritance tax, but you would need to take legal advise on this, as we are UK tax experts, so we can advise the tax position, but are not experts in the art of setting up and administration of trusts themselves.



With the second joint tenants, if either partner passes away, then their half share automatically passes to the surviving partner even if there is no will in place, as you are both treated as owning 100% of the property.


Either way, at each occasion Inheritance tax will have to be considered, as assets passed between you are not exempt as you are not married, and therefore for each of you, should your estate (including the half share of this property) exceed £325,000 then there is avoiding Inheritance tax, either on each other or for your children.

So this is why a trust (beneficiary) would be worth considering.


I am not sure what nominal tax you are making reference to, as the only tax position that would ever arise, is pre owned asset tax. And this only comes into play, when a property is gifted but the giftor remains having the benefit of the property, and this will not be the case. So for example you make the purchase and then gift a share each to your own children whilst alive and still benefit from the property. This would then require you to either pay market value rent (on the half share that the children then have inherited) or be subject to pre owned asset tax.

But this does not happen when one of the partners passes away and they then only own half the property as the other half have been bequeathed to surviving children of the deceased. This only happens if you gift your shares to your children whilst alive and continue to benefit from living there - and then DO NOT pay market rent.


You are merely considering putting in a right to remain or life interest within the arrangement, but this will not cost you anything should you be the surviving partner, nor would a trust if its written that no rents must be charged (as this could create a potential pit fall)


And clearly you want to take the tenancy in common route, its just a question of whether you wish to bind this in trust rather than have this written within the will, just make sure the rental income position is considered when just one of you survives, as this can avoid unpleasantness.


Finally the children who have inherited first (but have to wait due to the right to remain/life interest position) may find when the property is finally sold (when the surviving partner also passes away), may have capital gains tax arising, as they in essence will then be disposing of a half share of property that has not been their main residence that has increased in value, so do be mindful of this too.


Do feel free to ask any follow up questions. I have a meeting with a client shortly, but will be available from 2.30pm, and I will respond then, But if you could rate the level of service I have provided, it would be appreciated , as this ensures I am paid.










Sam, Accountant
Category: UK Tax
Satisfied Customers: 13572
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Capital Gains, CIS ask for Sam Tax
Sam and other UK Tax Specialists are ready to help you
Customer: replied 3 years ago.

If we go down the tenant in common route, will you please confirm that there will be no extra tax charge on the surviving partner's children's inheritance tax liability due to the fact that the survivor has been "lent" half the property for the period between the death of the first partner and their death.


Can you please clarify why it is necessary to have a trust rather than just handle it through our wills.



I am finished earlier from my meeting than anticipated. Thanks for your further questions.


No that's not correct - the children could have an Inheritance tax liability, as already advised but they will not be charged any extra charge due to the fact that they "lend" you their half, but MAY incur capital gains when they are finally able to sell, due to gain made between the value of their share from the time that they inherit it, and finally are able to sell it.


Its not necessary for you to have a trust, but its another way to handling this.





Customer: replied 3 years ago.

Thanks for help so far which has really clarified matters and we shall definitely go as tenants in common.


However we are still confused as to the point of a trust, presumably one which would name our beneficiaries, ie the kids. Why would we use one? There must be some benefit or advantage to be gained but we do not see what.


Can you just give us an example of the way in which a trust would be a help. .



Thanks for your response


Trusts can ensure the safety of the property for the beneficiaries, or children forcing a sale, but as you will cover this within the wills, then you in essence have these aspects covered.

However, there are savings to be made with Inheritance tax, if the property is worth less than £325,000 at the time it is transferred into trust.

But then you have the disadvantage that whoever the beneficiaries are this creates a pre owned asset position again, as you are benefiting from an asset that in essence is held for the beneficiaries. So this is why I have not expanded on this further.


So you are best just proceeding as you are - I just wanted to give you all considerations, as its your choice, how you take this forward.











JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Previous | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA

Meet The Experts:

  • TEAP007


    Tax Preparer

    Satisfied Customers:

    Fully Trained Inspector of Taxes / District Inspector/ Team Leader/ Offshore Consultant/ 41 years
< Last | Next >
  • TEAP007's Avatar


    Tax Preparer

    Satisfied Customers:

    Fully Trained Inspector of Taxes / District Inspector/ Team Leader/ Offshore Consultant/ 41 years
  • Andrew Baker(baktax)'s Avatar

    Andrew Baker(baktax)

    Personal Tax Adviser

    Satisfied Customers:

    35+ years experience in income tax, CGT, non-residence
  • berduchwal's Avatar



    Satisfied Customers:

    Qualified accountant and bookkeeper running my own practice since 2008.
  • Mrs-Tax's Avatar


    Tax Adviser

    Satisfied Customers:

    Law Degree, 19 years in UK Tax.
  • Thomas's Avatar



    Satisfied Customers:

    Exposure to general tax issues
  • AnthonyL's Avatar


    Tax Adviser

    Satisfied Customers:

    ATT, ATII, 12 years tax experience
  • Simon Hamilton's Avatar

    Simon Hamilton

    Chartered Management Accountant

    Satisfied Customers:

    CIMA - Chartered Institue of Managment Accountants