Inheritance Tax - Double Nil Rate Band ?

CADext

My Mother died January 2012. Her total estate is worth approx £500K. Her husband died in 1985 and left everthing to my Mother. I think she is entitled to 100% of her husbands IHT allowance at todays rate of £325K, plus her own £325K nil rate band allowance. But solicitor is telling me that the allowance was only £67K in 1985 so her full nil rate band would now be £325K + £67K = £392K. Meaning tax at 40% will be payable on approx £108K = £43K in tax. But I think the nil rate band should be £325K + £325K = £650K nil rate band and so no Inheritance tax is payable. Who is right, me or the solicitor. Thanks

Tixy

Hi

This might be better reposted in the Cutting Tax board for advice, rather than credit cards, click here Cutting Tax

Also might be worth a read on the HMRC website here and the worked examples they include. http://www.hmrc.gov.uk/inheritancetax/intro/transfer-threshold.htm#6