Transfer of unused nil rate band

sunsetboulevard

Uncle recently passed away. His wife died in 1991. None of her nil rate band was used when she died. Uncle inherited everything (the home they jointly owned and the jointly owned contents).

Can her unused nil rate band be added to my uncle's nil rate band giving a total of £650,000 before any inheritance tax is paid?

He left a will, naming myself and his brother (my father) as executors and the only beneficiaries. Can we do a deed of variation making me the only beneficiary as father does not wish to inherit anything? Thanks.

Skibunny40

My understanding is that yes, you can combine the unused nil rate band, but it's at whatever the rate was when your aunt died in 1991, not sure of the exact figure but less than £325k. That is then added to the current rate of £325k. Happy to be corrected though...

SevenOfNine

Jo101 wrote: »

Can we do a deed of variation making me the only beneficiary as father does not wish to inherit anything? Thanks.

Yes, though we used a solicitor over a DiY option to ensure it was done properly. Your father should be mindful of deprivation of assets, though it's NOT necessarily a foregone conclusion that this is his intention. See here http://www.ageuk.org.uk/home-and-care/care-homes/deprivation-of-assets-in-the-means-test-for-care-home-provision/

Your solicitor should discuss this with you both & should ask questions regarding his current financial status before agreeing that a DoV is a viable option.

Keep_pedalling

Skibunny40 wrote: »

My understanding is that yes, you can combine the unused nil rate band, but it's at whatever the rate was when your aunt died in 1991, not sure of the exact figure but less than £325k. That is then added to the current rate of £325k. Happy to be corrected though...

Not correct, it is the percentage of nil rate band used that is transfered at the current rate, so the total will be £650k.

Keep_pedalling

A DoV is a useful tool to avoid bumping up IHT on your father's estate, but does not avoid the loss of any current benefits or any future care costs as it would be deemed as deliberate deprivation of assets.

badmemory

Agreed - if your parent is ever in need of any benefit then he will be deemed to have received whatever was due to him from this legacy. Obviously if your father has sufficient assets of his own to deal with any eventuality then there would be no problem.

getmore4less

badmemory wrote: »

Agreed - if your parent is ever in need of any benefit then he will be deemed to have received whatever was due to him from this legacy. Obviously if your father has sufficient assets of his own to deal with any eventuality then there would be no problem.

If at the time of the transfer the father is already over the IHT nil rate band then there is clear link of the DOV to tax mitigation so not deprivation.

Yorkshireman99

In any case unless at the time there was a real prospect of him requiring future care it is NOT deprivation although some councils may try to claim that is.

Yorkshireman99

badmemory wrote: »

Agreed - if your parent is ever in need of any benefit then he will be deemed to have received whatever was due to him from this legacy. Obviously if your father has sufficient assets of his own to deal with any eventuality then there would be no problem.

This is nonsense! Only if at the time of the DOV there was there a foreseeable need for future care. It is not a blanket ban.

Margot123

Seeking advice from a solicitor specialising in Trusts might be a good idea. Money spent now can save hassle, stress and expense later on.

Yorkshireman99

Margot123 wrote: »

Seeking advice from a solicitor specialising in Trusts might be a good idea. Money spent now can save hassle, stress and expense later on.

Using a trust will not, AFAIK, make any difference.if DOA is a concern.