IHT query
Haf2001
Forumite 5 Posts
I’m trying to work out what my Mother’s IHT allowance is and am getting very confused.
My father died 4 years ago, my Mother was the sole beneficiary, everything was in joint names and I don’t believe that Grant of Probate was required or sought.
The estate at the time of my Dad’s death consisted of a very dilapidated farm house and another house (converted farm buildings) close by with a relatively small sum of savings. My Mother has renovated the house which is now a holiday let and we both live in the smaller house.
I am my Mother’s sole beneficiary and executor. She has terminal cancer and is getting very worried that I will have to sell up in order to pay IHT.
Is it correct that my Dad’s allowance passed to her and that she now has an allowance of £650,000?
Many thanks
My father died 4 years ago, my Mother was the sole beneficiary, everything was in joint names and I don’t believe that Grant of Probate was required or sought.
The estate at the time of my Dad’s death consisted of a very dilapidated farm house and another house (converted farm buildings) close by with a relatively small sum of savings. My Mother has renovated the house which is now a holiday let and we both live in the smaller house.
I am my Mother’s sole beneficiary and executor. She has terminal cancer and is getting very worried that I will have to sell up in order to pay IHT.
Is it correct that my Dad’s allowance passed to her and that she now has an allowance of £650,000?
Many thanks
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Not quite, her estate also has a primary residence nil rate band that will apply to it which is doubled up as your father’s PR nil rate band is also transferable, so that means anything under £850,000 is tax free. If she survives beyond the 5th April that will rise to £900,000.
https://www.gov.uk/government/publications/inheritance-tax-main-residence-nil-rate-band-and-the-existing-nil-rate-band/inheritance-tax-main-residence-nil-rate-band-and-the-existing-nil-rate-band
https://www.gov.uk/guidance/inheritance-tax-residence-nil-rate-band
That should be resolvable. Have you checked the land registry?
Is this still a working farm?
It’s no longer a working farm, most of the land was sold in the early 90’s with about 5 acres immediately around the house kept.
As others have said, you and your mother MUST go and see a solicitor and check whether the land was registered when the land sale took place. If not I would get it correctly registered now or as soon as you possibly can.
Also I would suggest that your mother and yourself write wills if you haven't already. They only need to be simple but they avoid any confusion and will be right up to date, especially as the land may not be registered and the deeds missing.