Main residence nil band rate

loulou41

On first death do you have to apply? Friend's husband died last year no probate as they did a mutual will years ago. Does she have to apply for residence nil band rate I believe his assets were below £325,000. She has not a clue and Indo not want to stress her by asking too many questions?

Rodders53

No.
Claim for unused allowance is made on second death, by executor(s) of that person's will.

loulou41

Found this on the web.
Added to the regular inheritance tax allowance, it means an individual can pass on £450,000 this tax year and in two years’ time, they’ll be able to pass on £500,000. Does this apply on second death?
My understanding is if the assets of the first deceased is over 325k there is a further claim of 125 k main residence rate band making a total of 450k and after that iht is payable. Have I got it wrong?

HappyHarry

loulou41 wrote: »

Found this on the web.
Added to the regular inheritance tax allowance, it means an individual can pass on £450,000 this tax year and in two years’ time, they’ll be able to pass on £500,000. Does this apply on second death?
My understanding is if the assets of the first deceased is over 325k there is a further claim of 125 k main residence rate band making a total of 450k and after that iht is payable. Have I got it wrong?

Yes.

If friend's husband left all to your friend, and your friend's estate will all go to the children/grandchildren, and the total estate is less than £2m, then your friend's executors will be able to apply for;
2x Nil Rate Band (as at time of your friend's death)
2x Residence Nil Rate Band (as at time of your friend's death)

So, your friend's executors could claim up to £1m of your friend's estate with IHT payable at 0%. Anything exceeding this threshold would be liable for 40% tax.