My girlfriend's dad won't put her on the house deeds even though she inherited half from her mum - will this mean a bigger IHT bill?

My girlfriend has been living with her father. When her mother died she left 50 per cent of the house to her.She has not put her name on the deeds yet, as her father said wait till he dies then she will be able to change the whole thing at once.Is this OK or on his death will she have to pay inheritance tax (IHT) on a total of £900,000? Is it best for her to put her name on the deeds now?Tanya Jefferies, of This is Money, replies: Questions about house deeds and whose name should be on them come up pretty frequently among our readers.We asked a lawyer who knows this area of the law well to answer you, and she explains what your girlfriend should check up on and do now regarding shared ownership of her parents' property. House deeds: How important is it to get your name on them if you inherit a share of a property (Stock image)Regarding IHT, we have a guide here, but anyone who might have total assets near or above the amounts below when they die should consider whether their estate might be liable.IHT is levied at 40 per cent above thresholds starting at £325,000 per person, but this rises to £500,000 if you leave a home to direct descendants.If you have a spouse or civil partner, they are exempt from IHT after the first partner's death.They also inherit the thresholds above, so after the second partner's death these double to £650,000, or £1million if you have a property to leave to your children, grandchildren, or their descendants. Jennifer Charlton: It is important in this case that the house was owned by the parents as 'tenants in common' and not as 'joint tenants'Jennifer Charlton, a partner in the private client team at Clarke Willmott, replies: To properly answer this question your girlfriend should first check the title of the property to understand how it was owned by her parents.It is important that it was owned by them as 'tenants in common' and not as 'joint tenants'.When owners are tenants in common, they can split the property into different shares – often but not always 50/50 – and leave them to someone else rather than the other owner.But when property owners are joint tenants and one dies, the other becomes the full owner, regardless of what is in a will.If your girlfriend's parents were tenants in common, in practice that means that there will be a restriction over the title to the property preventing its sale by only one of the owners.Even if your girlfriend's mother’s name has now been removed from the title, that restriction would still be in place following her death, protecting her share of the property.If it turns out the property was owned as joint tenants and there is no restriction over the title, the gift of the mother’s share of the property to your girlfriend in her will would not have been effective.Instead, the mother’s share would have passed automatically to your girlfriend's father as the surviving joint tenant, outside of the terms of the will.If you wish your share of a jointly owned property to pass to someone other than the remaining joint owner or owners it is important that you sever the joint tenancy so that you own the property as tenants in common.You can then leave your share of the property in accordance with the terms of your will or the intestacy rules.However, you can switch to 'tenants in common' even after one partner has died, and your girlfriend and her father can explore this if necessary.What did the will say?If the property was owned as tenants in common, it is then important to review the terms of the will to confirm that the gift of the mother’s share of the property was effective and free of any trusts which may affect how the title should be managed.On the basis that the property was owned by your girlfriend’s parents as tenants in common and the gift in the will was effective then beneficially your girlfriend will have an interest in the property.What about IHT?Broadly, IHT is charged on the underlying beneficial interest in an asset and not the legal ownership.Therefore, the IHT liability on the father’s death will be calculated only on the share of property in which he holds a beneficial interest.It makes no difference to that IHT position that your girlfriend’s name does not appear on the legal title because irrespective of the legal ownership, she still has a beneficial interest in that property.Should legal title be put in both names?Regardless of the IHT position, it is best practice to have the legal title reflect the underlying beneficial interests where possible and this would provide your girlfriend with protection over her interest in the property.This can be achieved by her father transferring legal title to the property into both of their names either as joint tenants or as tenants in common, so your girlfriend becomes a joint legal owner.Alternatively, your girlfriend could consider entering a restriction over the title to the property which confirms to interested third parties such as a potential purchaser or lender that she has a beneficial interest in the property.If your girlfriend’s name was added to the legal title it would mean that her father could not deal with the property without her knowledge because the daughter would also be required to sign all documentation in respect of the property, such as a sale or remortgage.Restrictions are flexible as to the control they give beneficial owners but as a minimum your girlfriend would have to be notified of changes to the property, and ideally she would have to specifically give her consent to such changes.