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Cyprus 2629
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Cyprus2629
Posts: 1 Newbie
in Cutting tax
A bit confused in Martin's article about Inheritance Tax he says in one section a couple are allowed asserts property savings car ECT of 900.000 before then pay tax further down Martin says so working it out if a couple has assets totalling 650.000 they should not have any tax to pay.
Confused on this one Martin.
Can someone clarify it for me please.
Confused on this one Martin.
Can someone clarify it for me please.
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Cyprus2629 wrote: »A bit confused in Martin's article about Inheritance Tax he says in one section a couple are allowed asserts property savings car ECT of 900.000 before then pay tax further down Martin says so working it out if a couple has assets totalling 650.000 they should not have any tax to pay.
Confused on this one Martin.
Can someone clarify it for me please.
Each has a Nil Rate Band of £325,000.
There is no IHT between married couples and those in a civil partnership. This means that if on first death, the remaining partner inherits everything, then the remaining partner's executors can apply to use both Nil Rate Bands, and have £650,000 of the estate charged IHT at 0%.
If someone leaves their main residence (or the value of it) to children or grandchildren, and the total estate is less than £2m, then the executors can claim up to an additional £125,000 (rising to £175,000 by 06Apr2020) for each parent.
Example:
Mr X dies in 2016 and left his entire estate to his wife, Mrs X.
Mrs X died in August 2018, and left her entire estate, including the £400,000 property they previously both owned to their two children. Mrs X's total estate was £1.9m
Mrs X's executors can use two Nil Rate Bands of £325,000 and two residence Nil Rate Bands of £125,000 to come to a total of £900,000 that will be taxed at 0%.
The remaining £1m of the estate will be taxed at 40%, generating a tax bill of £400,000.I am an Independent Financial Adviser. Any comments I make here are intended for information / discussion only. Nothing I post here should be construed as advice. If you are looking for individual financial advice, please contact a local Independent Financial Adviser.0
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