inheritance tax allowance

voip03

HI
I am in the process of calculating inheritance tax. My uncle left an estate, valued at £720,000. There are three beneficiaries, two are me and my brother (his nephews) and the other is my late uncle's brother. I am completely confused with the inheritance tax allowance.
I have a few questions:
1. Is the inheritance tax allowance £325,000 or is it £475,000
2. Is this allowance per beneficiary or a one-off allowance for the whole estate.

Savvy_Sue

Was your uncle ever married? If yes, was he married or widowed when he died?

It's one allowance per estate, but its size may be affected by the marriage question.

Is this England?

Keep_pedalling

£475k comes from the combination of nil rate band plus residence nil rate band. The latter only applies if a house is left to direct defendants so does not apply in this case.

If he is a widower who inherited all of his wife’s estate then there there is also the transferable nil rate band that can be claimed.

Edit, just rest your duplicate post in the housing board. Your uncle and aunt were never married, so only £325k of the estate is exempt from IHT. The nil rate band applies to the estate, and is paid by the estate before distribution to the beneficiaries.

Tom99

Just to add to the previous answer, if your uncle made gifts of over £3k pa in the past 7yrs this excess over the £3k pa allowance will be taken off the £325k nil rate band.

Keep_pedalling

Just to add for the benefit of other unmarried couples with large joint estates, the cost to the beneficiaries in this case is £130k in extra IHT (40% of the lost transferable nil rate band)

voip03

Savvy_Sue wrote: »

Was your uncle ever married? If yes, was he married or widowed when he died?
joint property ownership and aunt passed away then property transfer to uncle. never married.

It's one allowance per estate, but it's size may be affected by the marriage question.

Is this England?

yes in England