New Inheritance Tax threshold for couples

antenna

Although the allowance is backdated indefinately......i think only the value of half the estate t the time of the first death would be added to the surviving person's 300,000 allowance......i think this is what they mean by Carry Forward allowance............

xxxdxxx

Yes, but what about divorced people. Its hardly fair that singles will still have the £300,000 threshold. Why should some people have to pay more just because they are not married or divorced :mad:

antenna

This is very complicated........but as i understand it if at the first death the estate is valued at 600,000 pounds,on the second death the second death has a 300,000 allowance and the carry forward from the first death would be a further 300,000 pounds giving a total allowance of 600,000 pounds....but if half the estate value on the first death is less than 300,000 pounds then it is onlt this reduced amount that can be added to the survivors own 300,000 allowance.................

antenna

What is the cheapest way to arrange a Civil Partnership............WITH A DEAD PERSON............

noh

antenna wrote: »

Although the allowance is backdated indefinately......i think only the value of half the estate t the time of the first death would be added to the surviving person's 300,000 allowance......i think this is what they mean by Carry Forward allowance............

Although no details of how it will work have been given, I believe that carry forward the unused allowance means what it says. Ie if the first to die leaves all to their spouse the survivors estate has full use of allowance of the deceased. The value of the estate is irrelevant.

Nigel

EdInvestor

Pam17 wrote: »

My mum died in 1999 so does that mean that if my dad dies (hopefully not anytime soon) his estate would have the £600,000 allowance

Yes. Allowance transfer backdated indefinitely.

Willman_Rodders

Wait ... and wait still further ....

In the Finance Act 2006 huge changes were announced, impacting upon trust law. Then, as with other announcements made by this Government, came the supporting documentation; reams and reams of the stuff. The Finance Act 2006 looked significantly different from the implied (and headlined changes) originally announced.

This is a feature of this government; they announce something which grabs the headlines. Then the fine print is released, often sometime later - only the fine print shows a different outcome to that implied with the headline grabbing announcement. The figures quoted may be the same, but when put into the context of the smallprint the implications to the average person are significantly different. And because they tend not to be so major as was first implied, they do not make good headlines; infact they are boring to read. And so the law gets passed with few adverse comments.

The fine print is what is needed to be seen. When that is released, and it becomes law, only then we will know where we stand. Until then it will all be speculation and conjecture.

barak

sav4it wrote: »

What happens to all those trusts that have been set up then, I wonder?

Lots of fees for solicitors and tax accountants _party_ [That doesn't include me!]

Tiggs_2

This is all very simple.

Many sensible people already had Wills to use £600k anyway - no financial change for them (on the surface)

Many people didn't - they now get £600k despite being too lazy to have planned.

Some people had spouses that died before they could plan (or maybe years ago before IHT was a big deal) - good news for them, they just doubled their NRB

Anyone with a fancy Will for IHt COULD leave it alone - it will still work......however -

Its important to note that the amount of the NRB a SECOND to die spouse can use of the firsts is PROPERTIANL to that already used.

So Bob dies in 2007 and leaves £150k to his kids -he has used 50% of his NRB. His wife dies 20 years later when the NRB is now £600k.....she can only add on £300k being the 50% Bob didn't use (giving her £900k in total)

Better that Bob gives her ALL the assets (and 100% of his NRB) so she can use 100% X 2 when she dies in the future.....if Bob WANTS to give cash to the kids then leave it to his wife and have HER give it just after his death. She has now made a 7 year gift and when she dies in 20 years time she will have no liability to IHt on that gift AND a massive NRB.

So new advice is DONT have a fancy Will - give it ALL to your spouse and dont go leaving anything on 1st death elsewhere as you are, in effect, wasting some allowance!

All pretty simple really.

john1950

My wife died a few years ago, not long after I got early retirement, but I still live in the house we bought together.

The house is worth about the same as the inheritance tax threshold so I have had little incentive to save money because 40% of anything over and above the value of the house would disappear in tax if I died.

Does anyone have any definite pointers as to whether this new arrangement will apply to widows/widowers or is it as said in the speech i.e."from today"?

It is a bit important to me to find out about this for certain.