Advice on probate needed please

Savvy_Sue

zzzLazyDaisy wrote: »

re the IHT threshold - remember that if all the estate passes to the spouse, the IHT allowance is not used, and so when the second spouse dies both IHT allowances are available. That doesnt necessarily mean that you get double IHT allowance as the MIL's allowance is carried forward as was at her death, and by the time FIL goes his allowance may have increased. Nevertheless, this process will mean that many estates will be exempt on the death of the second spouse.

Daisy, am I right in thinking that it doesn't even have to be ALL the estate passing to the spouse, ie that if any part of the estate passes to the spouse then the survivor gets a double helping?

Must re-read the probate book ... my brother's dealing with it, but I'm a co-executor and ought to know what's what ...

Biggles

Kimitatsu wrote: »

Savvy thanks for the point about the will - that needs to be checked out because estate will probably go over the IHT threshold, and so I think he needs to take some advice on that.

Not if the house is jointly owned and the assets in her own name are only £80,000 or so. It would be an 'excepted estate' and you just fill in Form IHT205 (http://search2.hmrc.gov.uk/kbroker/hmrc/forms/search.ladv?sr=0&as=1&cs=UTF-8&sc=hmrcforms&sf=&sm=0&nh=10&tx3=2829&fl3=doctype%3A&op3=1&ty3=0&ha=19&tx2=excepted+estates&fl2=&op2=1&ty2=0).

zzzLazyDaisy

Savvy_Sue wrote: »

Daisy, am I right in thinking that it doesn't even have to be ALL the estate passing to the spouse, ie that if any part of the estate passes to the spouse then the survivor gets a double helping?

Must re-read the probate book ... my brother's dealing with it, but I'm a co-executor and ought to know what's what ...

Hi, my understanding is that any un-used portion of the IHT allowance passes to the surviving spouse. So, for example, if the first spouse left a house worth £200k to someone, and the rest to the surviving spouse, then only the balance of the IHT allowance after the £200k is deducted will be tacked onto the surviving spouse's allowance. BUT I am not an expert, and if anyone is affected by this, they should double check the rules.

PS if you do find out that I am talking cobblers, please come back and put me right so I know for the future

zzzLazyDaisy

Biggles wrote: »

Not if the house is jointly owned and the assets in her own name are only £80,000 or so. .

I understood OP to mean that once the estate had passed to FIL's sole name, then the total of HIS estate is likely to go over the IHT allowance - hence my comment about passing on un-used IHT allowance from MIL. My apologies if I misunderstood.

sloughflint

zzzLazyDaisy wrote: »

re the IHT threshold - remember that if all the estate passes to the spouse, the IHT allowance is not used, and so when the second spouse dies both IHT allowances are available. That doesnt necessarily mean that you get double IHT allowance as the MIL's allowance is carried forward as was at her death, and by the time FIL goes his allowance may have increased. Nevertheless, this process will mean that many estates will be exempt on the death of the second spouse.

I'm not sure if this just doesn't read right or if you have misunderstood the rules.

To be clear, it would be double the IHT allowance at time of second death irrespective of what the allowance is this year.

sloughflint

zzzLazyDaisy wrote: »

Hi, my understanding is that any un-used portion of the IHT allowance passes to the surviving spouse. So, for example, if the first spouse left a house worth £200k to someone, and the rest to the surviving spouse, then only the balance of the IHT allowance after the £200k is deducted will be tacked onto the surviving spouse's allowance. BUT I am not an expert, and if anyone is affected by this, they should double check the rules.

PS if you do find out that I am talking cobblers, please come back and put me right so I know for the future

You are right that it is the unused proportion that passes but remember that it is the threshold at time of second death that applies.

So if someone dies this year ( NRB=325k) leaving 200k to child, they have used 61.5% of their allowance and so the second spouse's allowance would become 138.5% of the NRB of the year of their death.

Savvy_Sue wrote: »

Daisy, am I right in thinking that it doesn't even have to be ALL the estate passing to the spouse, ie that if any part of the estate passes to the spouse then the survivor gets a double helping?

No, see example above.

zzzLazyDaisy

Apologies, you are right, the carry forward on the death of the second spouse is the current year's IHT allowance. So, in OP's case, as the whole estate has been passed to the fil, so the whole allowance will also pass, meaning that when the fil dies the IHT allowance, whatever it is then, will be doubled.

Thanks for pointing this out.

Edit - thanks also for the explanation re percentages when part of the nil rate band has already been used.