Inheritance Tax changes

cavyslave

zygurat789 wrote: »

When will he die and how much will his estate be worth when he does?

If he survives until the new changes come into force I would expect his estate to be in the region of about £600K

getmore4less

cavyslave wrote: »

If he survives until the new changes come into force I would expect his estate to be in the region of about £600K

New rules no difference IHT bill around £110k

Time the Brother started spending and enjoying life.

cavyslave

Thank you for your reply.

He's 92 and housebound with dementia. I doubt he's about to go on an around the world cruise. ��

seven-day-weekend

We own our bungalow as 50/50 tenants-in-common and intend each leaving our share to our son. Each share on today's prices would be about £75k. Would he have to pay any tax under the new regs?

zygurat789

seven-day-weekend wrote: »

We own our bungalow as 50/50 tenants-in-common and intend each leaving our share to our son. Each share on today's prices would be about £75k. Would he have to pay any tax under the new regs?

Your son, like you, will never have to pay IHT. Only the estate of a deceased person may have to pay it.
The amount you have to pay depends upon all your assets less liabilities, if your individual estates are worth less than £325,000 then there will be no IHT, this figure will rise to £500,000 by 2020.
Under your will you are each leaving half your house to your son so you will not pass all of your £325,000 (rising to £500,000 by 2020) to your spouse.

brucez

I tend to agree with Spenderdave, but how wide would the Nil Rate Band be if a single person leaves a property worth more that 500k, with instructions that it be sold and the proceeds distributed amongst one direct descendant and a number of other legatees?
How might the answer be affected if the entire estate were 1.000k and 325k were to go to the direct descendant?

andrewjameshoward

Does anyone understand the new IHT allowance in detail? The draft legislation is already up on the parliament website but I cannot get my head round it.

I am particularly interested in how widowed people will receive their deceased spouse's allowance. My mother has been widowed for 18 years. She lives in the same house she shared with my father and it is willed to myself and my siblings. Only a small bungalow, but enough for her to fall into the IHT bracket. After April 2017, does her estate just receive her own family property allowance for IHT or does she also receive carry forward from her deceased husband? Seems too good to be true but that's what a couple of newspaper articles I have read seem to imply. But they have been giving examples based on recent deaths, not 18 years ago. Anyone know the answer?

getmore4less

andrewjameshoward wrote: »

Does anyone understand the new IHT allowance in detail? The draft legislation is already up on the parliament website but I cannot get my head round it.

I am particularly interested in how widowed people will receive their deceased spouse's allowance. My mother has been widowed for 18 years. She lives in the same house she shared with my father and it is willed to myself and my siblings. Only a small bungalow, but enough for her to fall into the IHT bracket. After April 2017, does her estate just receive her own family property allowance for IHT or does she also receive carry forward from her deceased husband? Seems too good to be true but that's what a couple of newspaper articles I have read seem to imply. But they have been giving examples based on recent deaths, not 18 years ago. Anyone know the answer?

MY quick look a while back suggested it works the same way as the current transferable nil rate band.

The key being the second death determines the actual amounts.


If she got everything from your father(and not past to you with her having a life interest) she already has £650k nil rate band before the house bit.

SeniorSam

Whenever there is new legislation suggested, there is a period of uncertanty whilst the fine tuning is done. There may be a limited time in which the allowance would apply from earlier death, but all will eventually be revealed when the political machinery has covered all the ground and the actual allowances clarified.

andrewjameshoward

Disappointed that no-one has replied who understands this. Neither of the 2 previous comments is really apt. The first is just wrong..

(i) That is not how the transferrable nil rate band has worked. My father's nil rate band was used 18 years ago. It was a lot less that £325k at the time. There is nothing left to transfer. You don't get to transfer the increases in the nil rate band which have occurred since the first death.

(ii) It is not a question of new legislation being "suggested" and then things "settling down". The bill has been drafted and published. It is on the government website. Not being a lawyer or a tax expert though, I cannot understand what it is saying. I was hoping that someone that could would be browsing this website.

If anyone knows the answer, please post.