IHT questions

mgfvvc

1. Given an estate where the husband died intestate in the early 1970s, passing the majority of his estate to his wife and the remainder being about 10% of the IHT threshold at that time, is it correct to assume that the wife's estate then benefits from an allowance of approximately 90% of the current IHT threshold?
2. Given 1, does that 90% include 90% of the private residence allowance?
3. Given that the total estate will fall within the combined allowances are the Inland Revenue going to be much interested in the inventory of contents? There is only one item likely to be worth over £500 individually. Can I just put the rest under some generic heading, e.g. personal goods and chattels and estimate the contents of a 4 bed house to be say £2000?

Keep_pedalling

If the husband died before 13th November 1974 none of his estate would have been covered by spousal exemption, as it only came into effect on that date.

You can however claim the full transferable RNRB if the property concerned is at least twice that value.

You don’t need to provide an inventory of household chattels a nominal sum for the lot will suffice. 

mgfvvc

Keep_pedalling said:

If the husband died before 13th November 1974 none of his estate would have been covered by spousal exemption, as it only came into effect on that date.

You can however claim the full transferable RNRB if the property concerned is at least twice that value.

You don’t need to provide an inventory of household chattels a nominal sum for the lot will suffice. 

According to https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm43060 "From 22 March 1972 to 12 November 1974 spouse exemption was limited to £15,000".  The husband died within that period so I assume the amount inherited by the wife, being less than £15,000, was exempted? Am I misunderstanding that?

Keep_pedalling

mgfvvc said:

Keep_pedalling said:

If the husband died before 13th November 1974 none of his estate would have been covered by spousal exemption, as it only came into effect on that date.

You can however claim the full transferable RNRB if the property concerned is at least twice that value.

You don’t need to provide an inventory of household chattels a nominal sum for the lot will suffice. 

According to https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm43060 "From 22 March 1972 to 12 November 1974 spouse exemption was limited to £15,000".  The husband died within that period so I assume the amount inherited by the wife, being less than £15,000, was exempted? Am I misunderstanding that?

No you are correct, I was not aware of the £15k excemption.

mgfvvc

Keep_pedalling said:

No you are correct, I was not aware of the £15k excemption.

So allowing that the rest of the estate was around 8% of the then Nil Rate Band and that the house is worth at least twice the nil rate band, I estimate that the estate would need to be worth around £970,000 before any IHT was due?

Keep_pedalling

mgfvvc said:

Keep_pedalling said:

No you are correct, I was not aware of the £15k excemption.

So allowing that the rest of the estate was around 8% of the then Nil Rate Band and that the house is worth at least twice the nil rate band, I estimate that the estate would need to be worth around £970,000 before any IHT was due?

Sounds about right.

buddy9

The availability of RNRB and TRNRB will depend on who inherits the property