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m0ssim0

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Tom99

[FONT=Verdana, sans-serif]Does the will state £325k exactly or 'an amount equal to the IHT threshold'. If the later then I guess you will get £275k now plus the £50k you already have and no IHT will be paid.[/FONT]

m0ssim0

Hi Tom99, thanks for taking the time to reply, it states 'an amount equivalent to' rather than a figure.


I've been looking and I can't find any firm detail on whether spouse exemption will apply to the remaining amount or not.

getmore4less

It will depend on the exact wording if the following will apply which is probably what was intended.

The gift uses up £50k of the nil rate band.
(£325k-£50k) £275k is left of the nil rate band to distribute between you and sis, rest goes to step mum and get the spouse exemption.


What I suggest you do is work through the IHT forms(reading the guidance notes as well) it makes a lot more sense once you have a grasp of the basics and how the numbers get added up and then the exemptions applied.

There may be scope for a Deed of variation where all the estate goes to the step mum so she qualifies for the transferable nil rate band and then she gifts you the cash. this gives a second chance to use the nil rate band should she survive another 7 years.

Depends on the size of the estates and the is the residential nil rate band to play with if there is a house(but as step mum this may not apply to you as I don't think you will be eligible children)

edit: as there are a few complications I would use the IHT400 forms and help notes as these are more complete than te IHT 205, if it can be done on IHT205 you can still do that once you have done a dry run to get your head round what is needed.

it may be you need to seek advice to get clarification on the wording of the nil rate band legacy

eddyinfreehold

Hi m0ssim0 and my condolences.

I think your father may have taken legal advice here when writing his will. His wishes are quite complicated and seem to be carefully constructed by a solicitor. Without knowing the full value of the estate and whether any property is involved and how it is owned it is very difficult to be certain of anything. My advice would be to have this work done by a solicitor specialising in IHT law. I say this because anything except the simplest of estates is being trawled over with a fine toothcomb by HMRC these days and administration is taking a very long time. One thing is certain, all the records and correspondence need to be kept including the 50k lifetime gift, anticipating the second death in the marriage, namely your step mother. That will make calculating the value of the first death transferrable allowance on your step mother's estate much easier. Also I would make a copy of your father's will for all the executors for their reference and security purposes.

Keep_pedalling

Anything going to the spouse will be exempt, IHT would apply to any amount over £325k to others unless the primary residence nil rate is applicable.

It sounds like the will was written before or without proper consideration of the gift. I think payed for advice is required here.

eddyinfreehold

Keep_pedalling wrote: »

Anything going to the spouse will be exempt, IHT would apply to any amount over £325k to others unless the primary residence nil rate is applicable.

It sounds like the will was written before or without proper consideration of the gift. I think payed for advice is required here.

fully agree

Yorkshireman99

m0ssim0 wrote: »

Some advice would be gratefully appreciated on the following probate queries I have. I have recently lost my father and have recently discovered that I'm an executor to his Will. I have some initial queries I need some clarity on in order to help me point me down the correct path.


My father has stipulated that a sum up to the IHT threshold of £325K should be split equally between me and my sister with the remaining amount falling above this going to my Step-Mother. Would IHT spouse exemption apply in this case? Or, due to the fact she isn't the sole beneficiary, would it mean IHT will apply to the remaining amount?


To complicate things, my father gave me £50,000 3 years ago on the basis that I gave 50% of this to my sister if anything happens to him.


How would this be treated for IHT purposes as I believe it's a failed PET. If my step-mothers's share is exempt from tax I presume IHT would apply with tapered relief?


Given the above circumstances would I have to complete form IHT400?


Thanks.

It sounds like the will was badly drafted. You need paid for professional advice from an IHT specialist not an average High Street solicitor. The cost will be far less than the potential penalty if you !!!! it up.

YoungBlueEyes

Perhaps a call to the taxman would give you some answers and some peace of mind, til you get to a specialist solicitors?
HMRC Probate and Inheritance tax dept - 0300 123 1072