INHERITANCE TAX: Additional £175,000 Property Allowance

Susrida

Does the £175,000 additional allowance if you leave your property to your children or grandchildren for inheritance tax, still apply if you leave your property to them through a trust for sale, please?  My wife and I both have children from a previous marriage.  We own our £750,000 property half each as tenants in common and have both willed our half share of the property to our respective children.  Our wills stipulate that if one of us dies, the property goes into a trust for sale giving the other the right to continue living in the property until they decide to move or die.  The three trustees are one each of our children and the survivor of my wife and I.  The trustees must sell the property on both our deaths and distribute half the sale price to each of our children as specified in our wills.  Does this arrangement still qualify our estates for the additional £175,000 property allowance,  giving us each a total of £500,000 free of inheritance tax?

Keep_pedalling

As you are married, yes.

https://www.fjg.co.uk/blog/the-residence-nil-rate-band-a-common-misunderstanding/

Susrida

Many thanks for your quick and very helpful reply, Keep_pedalling.  The link you gave explains the situation very well.