Property ‘guru’ Samuel Leeds is giving Inheritance Tax advice on Instagram. Let’s see how accurate it is:

“If you own it [the house] jointly with your spouse it automatically passes to them”

Not true – this is only true if you are joint tenants. If you are tenants in common it’ll follow your will or the rules of intestacy.

“Your child has to pay 40% on anything they inherit worth over £325,000”

Broadly correct, but it’s the estate that pays the tax, not the child. Whilst the tax legislation calls it ‘Inheritance Tax’, in reality it’s an Estate Tax. Countries like France and Spain have a ‘true’ inheritance tax, where the recipient pays the tax due on their share of the assets.

“Your kid’s tax free allowance increases to £500k, if the house you pass to them was your primary residence”

Broadly correct – but that assumes that the estate is below £2m. If it’s over £2m, then the extra Residence Nil Rate Band of £175k tapers away, potentially to zero.

“If you “gift” your house to your child 7 years before you die, they pay ZERO inheritance tax”

Absolutely false. If you gift your house to your child and still live in it, you’re subject to the Gift With Reservation of Benefit Rules. This means that the house is brought back into your estate for Inheritance Tax purposes when you die. The only way around this is to pay market rate rent to children until you die, which most parents are unwilling to do*.

*This planning also comes with a health warning – in theory if you gift your house to your children and there is a family fallout your children could evict you from your home. I’ve only seen in once in my career, but it can happen