Inheritance tax

50Twuncle

My father (who is in good health and aged 85) lost his wife (my mum) - 13 years ago
She left about £80k - which was split between my father, myself and my sibling...

When my father passes (he will probably outlive me) - he has a house worth £350k plus another £300k in savings - I am aware that my mums allowance is added to his since he has not remarried - but does the £80k get taken off this amount ot is it treated as a single sum ?
ie) Is he still allowed £650k (2*£325k) before any tax is taken off ?

getmore4less

Getting remarried does not lose the transferable nil rate band.


some(2/3 of £80k) of the nil rate band of your mum at the time will have been used from this you calculate the %uplift of the cuurent NRB for your dad.

https://www.gov.uk/guidance/inheritance-tax-transfer-of-threshold

Keep_pedalling

13 years ago the nil rate band was £255k, so the £80k used up approx 31.5% of the allowance which will reduce the current transferable NRB to aprox £223k.

Hiowever assuming he will be leaving the bulk of his estate to his children, he also has 2 lots of primary residence nil rate band to use (currently £100k each) so his estate will not pay a penny in IHT unless he wins the lottery or he inherits a substantial amount himself.

50Twuncle

Keep_pedalling wrote: »

13 years ago the nil rate band was £255k, so the £80k used up approx 31.5% of the allowance which will reduce the current transferable NRB to aprox £223k.

Hiowever assuming he will be leaving the bulk of his estate to his children, he also has 2 lots of primary residence nil rate band to use (currently £100k each) so his estate will not pay a penny in IHT unless he wins the lottery or he inherits a substantial amount himself.

Right - so potentially, he has an tax free allowance of £200k + £325k + £223k = £748k ?
That's good news - no need to transfer anything to us, yet ?

Keep_pedalling

50Twuncle wrote: »

Right - so potentially, he has an tax free allowance of £200k + £325k + £223k = £748k ?
That's good news - no need to transfer anything to us, yet ?

Correct and the primary residence NRB goes up in April so there will be another £50k to play with and another £50 the following year, assuming an incoming government does not change the rules.

getmore4less

Keep_pedalling wrote: »

13 years ago the nil rate band was £255k, so the £80k used up approx 31.5% of the allowance which will reduce the current transferable NRB to aprox £223k.

Hiowever assuming he will be leaving the bulk of his estate to his children, he also has 2 lots of primary residence nil rate band to use (currently £100k each) so his estate will not pay a penny in IHT unless he wins the lottery or he inherits a substantial amount himself.

some(1/3 ?) had spouse exemption

nom_de_plume

His IHT allowance will actually be slightly higher as only the part of the £80,000 that went to the children would affect the calculation. The part that went to your father would not affect mum's IHT allowance.

nom_de_plume

getmore4less wrote: »

1/3 had spouse exemption

Assuming the £80,000 was shared equally.

Keep_pedalling

nom_de_plume wrote: »

His IHT allowance will actually be slightly higher as only the part of the £80,000 that went to the children would affect the calculation. The part that went to your father would not affect mum's IHT allowance.

Whoops! I miss read the opening post, even safer than I thought.