Rather than leaving their half of a property to the surviving spouse or registered civil partner, an individual may bequest a life interest only. It is taxed at 70% of the value less 1% per year that the beneficiary is over the age of 20 –
e.g. if the surviving spouse or civil partner is 60 years old – the life interest is valued at 70% – 40% (60 – 20 = 40) = 30% of the half of the property owned by the deceased which is a 70% reduction in the taxable base.
In fact, where there are children, then it may be interesting to convert from outright ownership to life interest only. In this way ownership would be in the names of the children from the outset and any inheritance tax would be negligible as upon death the life interest would be extinguished.
The owners (in this case the children) would be prohibited from dealing with the property without the express consent of the life interest holders.