In cases where the estate contains both assets owned wholly
by the deceased and joint property passing by survivorship the IoV
may refer only to property passing under the deceased's will. If
this property is insufficient to cover the legacies proposed under
the IoV then any of the property passing by survivorship which is
used in satisfaction of those legacies will not attract the
protection of IHTA84/S142 and will therefore be a PET.
If the IoV meets all the usual criteria, you may accept that
it is within IHTA84/S142 (1). But when writing to the taxpayers you
should point out that there are insufficient funds passing under
the will (including any property held as tenants-in-common) to meet
the legacies proposed under the IoV and ask them how they intend to
satisfy the legacies.
If the taxpayers propose an IoV to redirect the relevant
proportion of the survivorship property, then provided the new IoV
meets all the other criteria it too may be accepted within
IHTA84/S142 (1).
Alternatively, if the taxpayers are content that the effect
of the IoV is limited to property passing under the will and any
transfer of survivorship property is a PET, you need do nothing
more than put a cross-reference on ALF for the surviving joint
owner.
Any other circumstances should be referred to TG.
