In Parveen Chadda, Eileen Nash & Pauline Moroney v HMRC [2014] TC04151 the First Tier Tribunal considered whether a joint tenancy had been formally severed for IHT purposes.
In a will planning exercise a couple set up Nil Rate Band trusts they each owned the property that was to be put into the trusts as joint tenants. Jointly held property passes by survivorship and not by will. It was therefore essential in this planning for the couple to sever their joint tenancy so that the interest of the first to die the property could be left by will to the trust and would not pass directly to the survivor. Unfortunately the Notice given in severing the tenancy was lost.
After examinging the evidence including a draft notice in the adviser's file, the FTT concluded that there was sufficient evidence to show that the couple had signed the Notice.
Comment
Joint tenants can avoid this problem by formally notifying the Land Registry of any changes.
Links: Parveen Chadda, Eileen Nash & Pauline Moroney v HMRC [2014] TC04151
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