IHT - Problems Using Spouse Allowance

rich911

Would anyone have encountered/heard of any problems with HMRC making it difficult to use deceased spouse IHT unused allowances?
I was recently helping my elderly father open up a building society account for his maturing bond, and was asked about IHT planning. The society employee mentioned HMRC were 'making it difficult to use these by asking for all receipts going back 10 years prior to spouses death'. This is news to me, but would appreciate any feedback.

CLAPTON

receipts for what?
what's that got to do with IHT?

rich911

Not quite sure, took it to mean receipts to prove what payments and income related to. My mother passed away 2 years ago, so going back 10 years prior to that would be a problem.

CLAPTON

deceased IHT allowance relates to how much of their estate when to their surviving spouse and how much elsewhere... if everything went to the surviving spouse then that spouse's estate can use 100% of the first deceased allowance.

rich911

Thanks for the info Clapton. Think it was probably 'scare tactics' to get my father to see their IHT specialist and no doubt use their services or products.

James_Trimby

There will be problems as the change in rules effectively backdates required research by 50 plus years (very rare, but I have an elderly client who was widowed some 30 years ago so in theory we would need to go back 37 years for husbands gifts etc - I have every intention of taking her and her families word for it that all when to her!) The problem is that for smaller estates or where all or most was exempt there is little paper work required. BUT it now matters whether 10% of the then exemption was used up or not (£13400 tax). However I have not heard of a problem with normal families estates.

IF your fathers wealth is worth over say £600,000 it may be worth doing some planning (some investment bonds can be put in trust for instance so that monies don't go back into estate should he die before they mature) but you need to see an expert and/or an IFA not a bank of building society salesman!