the times | Saturday June 11 2022 65Money
I
am trying to help a friend
who recently lost her partner,
Adrian, to cancer. It was always
their intention to get married,
but in the end the cancer beat
them to it and they never did.
They lived in a house that Adrian
bought in his name 20 years ago, with
her moving in a few months later.
They had an arrangement where
they split the mortgage repayments,
paying £700 each. In his will Adrian
left her the £300,000 house in War-
wickshire, and she is now wondering
how much inheritance tax she will
have to pay.
Bank records prove that for
20 years she has paid half the mort-
gage, and she has contributed to the
upkeep over the years. My under-
standing was that these contribu-
tions meant the law would recognise
that my friend owns half the home.
If this is correct, I am wondering if,
when inheritance tax is calculated,
only £150,000 of the house should be
subject to inheritance tax.
Her solicitor has advised other-
wise, that HM Revenue & Customs
(HMRC) will insist that the full value
of the house is subject to inheritance
tax, which seems terribly unjust to
me because it does not recognise the
reality that the house was effectively
owned jointly.
Name and address suppliedTroubleshooter says
Trying to sort out finances after the
death of a loved one is very difficult,
so it’s wonderful to have friends who
offer this kind of practical help.The situation your friend finds her-
self in is not uncommon, particularly
since there are 3.6 million cohabiting
couples in the UK. These couples
can’t claim the tax perks afforded to
married couples and civil partners,
who can inherit their other half’s
entire estate tax-free.
Everyone gets a £325,000 tax-free
allowance on their estate when they
die. You have told me that the value
of Adrian’s estate is likely to be
£500,000, so inheritance tax (IHT)
would be due on about £175,000 if
your friend cannot prove that she
owned half the house. IHT is charged
at 40 per cent, so the bill for the full
estate would be £70,000. If she cansuccessfully claim that she has a
50 per cent share in the property her
share would not be part of the estate
for IHT purposes, and only £25,000
of the total estate value would be
subject to IHT (making a bill of about
£10,000).
She could argue that she has a
“beneficial interest” in the house. In
other words, she could be entitled to
a financial share in the property
without being the legal owner.
Thomas Middlehurst from the
law firm Moore Barlow suggested
completing IHT returns on the
basis of 50 per cent of the property
failing outside of the estate, making
sure that she attaches any evidence
of the equal payments and an
affidavit, a written statement that is
sworn to be true. He said that the fact
that your friend is still living in the
property should support her case.
However, if her argument isn’t
successful she would have to pay the
full amount of IHT and incur interest‘Does my grieving friend owe tax?’
Katherine
Denham
Times Money
Mentor
Troubleshooter
for the time it took to resolve the
issue.
Mike Muston from the law firm
Royds Withy King said he has dealt
with a similar case, in which a cohab-
iting partner received a 50 per cent
beneficial interest in the property
registered solely in their late part-
ner’s name. However, the surviving
partner had to go through the legal
system to achieve this, so it’s possible
that your friend will have to give
evidence in court, alongside anyone
else who stands to inherit some of
Adrian’s estate. The other downside is
that legal fees can run into thousands
of pounds.
Unfortunately, your friend’s case
highlights one of the benefits of
marriage, in that it makes things a
lot simpler financially when one
partner dies.Money Mentor
Online
Find out how to reduce
your inheritance tax bill
thetimes.co.uk/money-mentorIf you would like us to investigate
a consumer problem, write to
Troubleshooter, Times Money,
1 London Bridge Street,
London SE1 9GF or
[email protected].
Please include a phone numberNot very wowed by Wowcher
In December last year I bought
a voucher for a two-night stay at
a hotel through the Wowcher
shopping deals website. The stay
was a Christmas present for my
wife and included evening meals
and use of the spa.
Wowcher’s offer meant we had
to book the stay before the end of
March, so in January I contacted
the hotel, only to be told that the
hotel was being renovated and
wouldn’t be open until April.
Staff said that they would honour
the voucher when it reopened,
but when I got in touch in April
I was told that the hotel was
having more renovation and
wouldn’t be open until 2023.
I wasn’t happy with this and
tried to contact Wowcher but
there seemed to be no customer
service phone line. Instead, it
wanted me to communicate via
WhatsApp or Facebook. I’m
not young and have no
smartphone, so I asked my
daughter and her partner to help
me. He got a reply on WhatsApp
simply stating that my Wowcheraccount
would be
credited with
the £120 and
I would have
five days to
rebook
something.
There was
nothing else that I wanted to buy
from its website, so I said I would
prefer the money in my bank
account. The voucher has now
expired and I am finding it
impossible to communicate with
Wowcher. I just want my money.
Tony Caulton
WarwickshireTroubleshooter says
Wowcher joins up with a range of
merchants to offer discounts on
products and services such as
furniture and holidays. Once a
customer has chosen a deal they
buy a Wowcher from the website
and use the voucher code to
redeem it on a partner’s site.
Given that the hotel you had
chosen was closed, I wonderedwhy Wowcher was offering a
voucher for it. And it seems
very unfair to give you such a
short time — five days — to
allocate the £120 to a new deal.
When I intervened, Wowcher
said: “We are sorry to learn that
our customer was unable to take
advantage of his deal because of
our merchant’s ongoing
renovations.”
It agreed to offer you a full
refund.
When I asked why its
communication had been so
poor, it reviewed the messages
and admitted that some of its
responses didn’t adequately
address your issue. It said it
would feed this back to the
agents involved.
Wowcher said: “We aim to
provide a high level of service,
so it is regrettable that on this
occasion our responses fell short
in that regard.”
You were happy to get the
money — I just wish that
companies would stop making it
so difficult.