IHT404: jointly owned assets, who needs it, and how to fill it in

Joint tenants own the whole asset together (they cannot identify 'their share').

When one dies, the surviving joint tenant(s) automatically own the whole asset.

The deceased's share does not pass under the will or intestacy.

However, the market value of the deceased's notional share (usually 50% for two joint tenants) is still included in the estate for IHT purposes.

HMRC includes it; it just does not need to go through probate.

Tenants in common each own a defined share (equal or unequal).

When one dies, their share passes under the will or intestacy — it does NOT pass to the surviving co-owner automatically.

This means probate or administration is required to deal with the share.

The full value of the deceased's share (whatever percentage they owned) is an estate asset and must be reported on IHT404 and included in IHT400.

Order the title register from HM Land Registry (£7 at gov.uk/search-property-information-land-registry).

If the Proprietorship Register shows a 'Form A restriction', the property is held as tenants in common.

No restriction = likely joint tenancy.

For bank accounts, check the account mandate: most joint accounts default to joint tenancy (both parties can operate the account and the survivor takes all), but some accounts have been set up as tenants in common with a specific agreement.

A joint tenancy can be converted into a tenancy in common by 'severing' it — this is done by serving a written notice on the other owner(s).

Once severed, the right of survivorship is gone and each owner has an identified share.

Check whether either party ever served a notice of severance, particularly following a divorce or separation.

For each joint account: name of the bank or building society; account number and sort code (or building society roll number); type of account (current, savings, ISA, premium bonds); balance at the date of death.

Contact the bank's bereavement team to request an official date-of-death balance — many banks provide this in writing within a few days.

For a standard two-person joint account, the deceased's share is 50% of the balance.

However, if the funds in the account came entirely from one person (for example, a joint account set up between a parent and child for convenience, where all the money was the parent's), HMRC may treat the full balance as the deceased's estate — not 50%.

The default is 50% unless there is clear evidence of a different beneficial ownership.

Most joint bank accounts pass to the surviving account holder automatically, without probate.

The survivor notifies the bank of the death and the account is transferred into their sole name.

But for IHT purposes, the deceased's share of the balance at death is still included in the estate.

The open market value of the whole property at the date of death is required.

For a property that was the main residence, estate agents' written valuations (typically three comparable market appraisals averaged) are accepted by HMRC.

For more complex or high-value properties, a RICS (Royal Institution of Chartered Surveyors) valuation is strongly recommended.

HMRC's District Valuer Service (DVS) may independently review property valuations and often argues for higher figures.

For a joint tenancy: 50% of the property value (for two equal joint tenants).

For a tenancy in common: the percentage the deceased actually owned (which may not be 50% — check the title deeds or any declaration of trust).

If the property passes to someone other than the surviving co-owner — for example, the deceased leaves their share to their children but the surviving spouse continues to live there — HMRC allows a discount of typically 10–15% on the deceased's share to reflect that it cannot be sold immediately without the co-owner's cooperation.

This discount is often contested by HMRC so professional valuation advice is advisable before claiming it.

HMRC's related property rules can increase the value of a jointly owned asset above its proportionate share.

For example, if the deceased's 50% share of a house would be worth significantly less on the open market than a 50% share of the whole property value, HMRC may substitute the related property value.

This most commonly affects minority shares in property.

Use the 'quarter up' rule for listed shares: take the lower market price on the date of death, and add one quarter of the difference between the lower and higher price.

For example, if a share was quoted at 200p–212p, the IHT value is 200 + (12 × 0.25) = 203p per share.

The deceased's proportionate share of jointly held investments is valued in the same way.

Contact the registrar or share dealing account to confirm the number of shares and joint ownership.

ISAs cannot legally be held in joint names — they are individual accounts.

If you find a reference to a 'joint ISA', it is either a standard ISA in one person's sole name, or a current account-linked arrangement.

Report the full ISA balance (in the deceased's sole name) on IHT406 (bank accounts), not IHT404.

Jointly owned business assets (partnership shares, jointly owned business premises) are reported on IHT404 but may also attract Business Property Relief (BPR) or Agricultural Property Relief (APR).

Report the full value on IHT404 and then claim the relief on the appropriate supplementary schedule (IHT413 for business, IHT414 for agricultural).