Inheritance Tax allowance claim from 1978

edges

Are the executors of a lady, widowed in 1978, able to claim any of her late husband's Inheritance Tax allowance against her estate? When the husband died his estate was some £18,000 below the then threshold of £25,000 and the whole of his estate passed to her.

getmore4less

1978 although it was Capital transfer tax the spouse allowance applied so it is the same calculation as the current one.

If everything went to spouse 100%.

subject to their being no relevant lifetime transfers(Gifts/PETS)

she should have a new nil rate band of £650k and if needed there will be the £200k RNRB to play with if that qualifies.

myrnahaz

I believe that 1972 was the start date from which such allowance transfers were allowed between spouses. I've just tried to do the same thing for an elderly lady but, unfortunately, I could not use her late husband's allowance as he died in 1971.

eddyinfreehold

I am in a similar position at the moment. I am 1 of 3 children. My father was widowed in 1970 and never remarried. He died last year. Although the procedure is slightly more complicated with us the principle is the same. Estate duty was abolished and CTT introduced. This was abolished and IHT introduced. As I understand it whatever ED or CTT threshold existed at the time of the first spouses death counts. In my case 10000 of which my mothers estate was 2000. Therefore 80pc of her 325k allowance can be transferred to join my fathers allowance so that the first 268k plus 325k is IHT exempt.... ie 593k. In the case above the calc is (18/25 x 325k) + 325k = IHT allowance subject to all the above provisos like not remarrying etc.

Keep_pedalling

eddyinfreehold wrote: »

I am in a similar position at the moment. I am 1 of 3 children. My father was widowed in 1970 and never remarried. He died last year. Although the procedure is slightly more complicated with us the principle is the same. Estate duty was abolished and CTT introduced. This was abolished and IHT introduced. As I understand it whatever ED or CTT threshold existed at the time of the first spouses death counts. In my case 10000 of which my mothers estate was 2000. Therefore 80pc of her 325k allowance can be transferred to join my fathers allowance so that the first 268k plus 325k is IHT exempt.... ie 593k. In the case above the calc is (18/25 x 325k) + 325k = IHT allowance subject to all the above provisos like not remarrying etc.

80% of £325k = £260k not £268k

getmore4less

eddyinfreehold wrote: »

I am in a similar position at the moment. I am 1 of 3 children. My father was widowed in 1970 and never remarried. He died last year. Although the procedure is slightly more complicated with us the principle is the same. Estate duty was abolished and CTT introduced. This was abolished and IHT introduced. As I understand it whatever ED or CTT threshold existed at the time of the first spouses death counts. In my case 10000 of which my mothers estate was 2000. Therefore 80pc of her 325k allowance can be transferred to join my fathers allowance so that the first 268k plus 325k is IHT exempt.... ie 593k. In the case above the calc is (18/25 x 325k) + 325k = IHT allowance subject to all the above provisos like not remarrying etc.

One of the main differences is the lack of spouse exemption.

eddyinfreehold

"80% of £325k = £260k not £268k"

...stupid arithmatical error...sorry

eddyinfreehold

"One of the main differences is the lack of spouse exemption"

...can you elaborate getmore4less ?

Whether the death of the first spouse occurred during the regime of Estate Duty, Capital Transfer Tax or Inheritance Tax, the fraction of the then allowance not used at the time is the fraction of £325k which can be transferred to add to the 325k allowable for the second death, subject to the second death never having remarried. Correct or not?

getmore4less

eddyinfreehold wrote: »

"One of the main differences is the lack of spouse exemption"

...can you elaborate getmore4less ?

Whether the death of the first spouse occurred during the regime of Estate Duty, Capital Transfer Tax or Inheritance Tax, the fraction of the then allowance not used at the time is the fraction of £325k which can be transferred to add to the 325k allowable for the second death, subject to the second death never having remarried. Correct or not?

AT that time any transfer to spouse(and charities) were not exempt as they are now(partial exemption from 1972).

if you end up with multiple deceased spouse/civil partners you get to use multiple transferable nil rate bands upto 100%

Keep_pedalling

Don't forget that the new primary residence nil rate band (currently £100k) may also apply and that is fully transferable regardless of the date of death of the first spouse.

eddyinfreehold

getmore4less... thank you