Every week, The Telegraph’s Property Doctors bring expertise on renovations and DIY, planning, buying and selling, lettings, legal issues and taxes.

In this Q&A, Stefanie Tremain, a UK tax specialist, tackles the legal issues surrounding passing on property and assets to children.

Inheritance tax can be tricky to navigate, and if not done correctly, can risk leaving loved ones with legal issues and substantial fees. 

There’s normally no Inheritance Tax to pay if either the value of your estate is below the £325,000 threshold, or you leave everything above the £325,000 threshold to your spouse, civil partner, a charity or a community amateur sports club.

And, if you give away your home to your children (including adopted, foster or stepchildren) or grandchildren your threshold can increase to £500,000.

Read on to find out how Stephanie advises a married couple on how best to leave their assets to their son.

What is the best way to organise our financial affairs for inheritance?

Q: My wife and I own our home as tenants in common, mortgage free, which is worth about £1.5m. In addition, we each own solely a property worth £400,000, mortgage free, which we let out. I have shares and investments currently worth £571,000, and my wife’s are worth £682,000. We are both in our eighties.  

On our deaths, we would like to maximise the amount we leave to our only son. As our savings and investments are at present tied up, we would prefer not to hand over any money while we are both still alive.

AMS, by email

As your main home is already held in tenants in common, your wills could direct that your share in the house passes to your son on the first death.

Assuming the rest of the estate passes to the surviving spouse, and that the value of a 50pc share in your house is still worth around £750,000 on the first death, the nil rate band (currently £325,000) and the main residence nil rate band (currently £175,000), would reduce the chargeable estate to £250,000, meaning an inheritance tax liability of £100,000 could arise on the first death.  

On the second death, there would be no transferable nil rate band available and the chargeable estate would be reduced by one nil rate band (£325,000). The main residence nil rate band is currently £175,000, so the potential IHT saving is £70,000.  

However, on the assumption that the house is owned equally this will accelerate the tax charge and your son would need to fund the tax arising on the first death. It may be possible to pay the tax due in instalments, with interest charged until the full amount is settled. There would also be capital gains tax implications of taking this route, which should be considered alongside the IHT benefits.

If you do decide to review your wills for this point you should also obtain legal advice regarding the rights of the surviving spouse.  

Stefanie Tremain is a Private Client adviser specialising in UK tax at accountancy firm Blick Rothenberg