Family home bequeathed to children

getmore4less

Flugelhorn wrote: »

Is it the current value of the Family Home Allowance?

That's just another name for RNRB

Flugelhorn

getmore4less wrote: »

That's just another name for RNRB

Yes that would be the 100k but the OP said:

I am not trying to claim residence nil rate band just want the 100k allowance on top of 325k iht.

I think they probably are wanting to claim it but could also claim mother's NRB

Lisa0501

Looking at gov.uk inheritance tax - passing on a home - the allowance can increase to 450k if home left to children.

Tom99

Just complete IHT205 + IHT217 as suggested by KP in post 6. Much simpler than filling in IHT400 with all the supplementary forms that go with IHT400. It will also give you £650k free from IHT so miles of headroom above the estate value of c£340k and you won't need to apply for RNRB.

If your father died after 6th April 2018 the RNRB is £125,000 not £100,000 so £325,000 + £125,000 would equal £450,000.

Re any CGT on a subsequent sale of the property:

Since you will not pay IHT the value of the property will not be 'determined' for IHT and whilst it would be usual to use the probate value of the property as the estate or beneficiaries acquisition price for CGT, you are not forced to do so. So if say you declared £325k as the value of the property for probate but later had a professional valuation for CGT at £350k than you could use £350k for CGT.

Given the IHT headroom you have you might as well apply for probate using the higher of you range at £340k since no IHT is going to be paid anyway.

Assuming £340k was the correct figure then CGT would be calculated on any gain above that figure less allowances.

If the property is sold by the estate, then the estate gets one £11,700 CGT allowance this tax year and for 2019/20 and 2020/21, after which the estate does not get any annual allowance. The estate also pays CGT at the higher rate of 28%. The estate does not get a main residence exemption so you could end up paying CGT even if the property is your main residence since it is not you disposing of it.

If you think the estate is going to make a taxable gain above the allowance and after taking off all of the other acquisition and disposal cost (which can be considerable) then you should consider transferring the beneficial interest in the property to the two beneficiaries before contracts are exchanged.

Then each of the beneficiaries would have a £11,700 allowance and maybe only pay tax, if any, at the lower rate of 18% depending on their circumstances. You would also qualify for main residence exemption if you have lived in the property as your primary residence since the interest was deemed to pass to you which would be the date of your father's death until the date of disposal.

You do not have to transfer the legal interest to the 2 beneficiaries only the beneficial interest, this is much simpler and does not involve the faff of Land Reg fees and application time.

The beneficial interest can also transfer to the beneficiaries even with out this happening, if you can claim that before the house sale was completed that the 'administration period of the estate has ended because the residue of the estate has been determined' ie that all assets an debts are known fixed sums or have already been collected/paid.

getmore4less

Lisa0501 wrote: »

Looking at gov.uk inheritance tax - passing on a home - the allowance can increase to 450k if home left to children.

That's using the RNRB which you say you don't want to use.

Work through IHT205(use the notes IHT206) until told to use IHT400 the transferable NRB is covered by IHT217