Dear Susanna,

If you are not married you will in the least favourable group. Your children will come under group 2 in any case, unless of course one of the children not related to one of the owners does inherit.

With regards to the sum on which the tax will be applied it is the amount being bequeathed, which means that if you inherit from your partner, or viceversa, you will have to pay taxes only on 50% of the value of the property.

You may wish to change you will whereby your children will receive the bare ownerhsip of the property while you both retain the life interest. This will reduce the exposure on IHT quite considerably.