Is there a time limit on a deceased parent’s inheritance tax allowance?

Splanky

My father-in-law died in 1994, and did not leave a will, so everything passed to my mother-in-law. She is currently doing some estate planning and wondering whether his full tax allowance will still apply, therefore effectively doubling what she can leave before becoming liable to inheritance tax?
Thanks

00ec25

sort of....

how much was the estate worth at date of FIL's death?
As he died intestate (no will) it depends on the numbers whether "everything" passed to MIL as obviously they had children who may have been automatically awarded a share even if they never saw that as cash in the bank

you need to find out what the threshold was in 1994 so you can then work out what, if anything was above that

as potentially some of FIL's estate above the threshold would pass to his children, then it is potentially incorrect to say 100% of his allowance went to his wife and can be carried forward

do you understand that FIL's "allowance" is expressed as a % not as a monetary sum. So if 100% went to MIL, then yes, MIL now has 100% of the current allowance to add to her own, Alternatively, if some went to his children under intestacy rules then MIL would have less than 100% available to her now


it sounds like you are not well placed to be helping MIL with tax planning. Is MIL trying to DIY everything? That will probably be a mistake and she may need to see a solicitor or estate planner

xylophone

My father-in-law died in 1994, and did not leave a will, so everything passed to my mother-in-law. She is currently doing some estate planning and wondering whether his full tax allowance will still apply, therefore effectively doubling what she can leave before becoming liable to inheritance tax?
Thanks

See pre 2014 here

https://www.pwwpl.com/news/intestacy-changes-1-october-2014

Nil rate band in 1994 was £150,000.

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm43001

Main residence nil rate band

https://www.gov.uk/government/publications/inheritance-tax-main-residence-nil-rate-band-and-the-existing-nil-rate-band/inheritance-tax-main-residence-nil-rate-band-and-the-existing-nil-rate-band

xylophone

See also

https://www.pruadviser.co.uk/knowledge-literature/knowledge-library/transferable-nil-rate-band-facts/

For example, Janet died in 2008/09 when the NRB was £312,000. She left £156,000 to the children and everything else to her husband John who subsequently died when the NRB was £325,000

50% of Janet’s NRB was unused.
John’s NRB may be increased by 50% to £487,500.