Tax applicable.

Jeremy535897

Yes. The inheritance tax liability, if any, falls on the estate. There may be none, as the gift to his wife is exempt, and the balance will have the remainder of the nil rate band and the residential nil rate band available.

Misteek

Jeremy535897 said:

Yes. The inheritance tax liability, if any, falls on the estate. There may be none, as the gift to his wife is exempt, and the balance will have the remainder of the nil rate band and the residential nil rate band available.

I was under the assumption that the 299k will be added to the 350k. So there will be some inheirtance to pay (minusing the wife) .. as for arguments sake 299k plus 200k from estate( takens wifes share out) ... would  be roughly 500k.... so therefore my friend doesnt pay. However as it went over 325k in total... the siblings may havr to pay?  Is this incorrect?

Jeremy535897

As I said, the residential nil rate band may also be available. See:
https://www.gov.uk/guidance/inheritance-tax-residence-nil-rate-band

The £299,000 reduces the £325,000 nil rate band, yes. If the residential nil rate band is available in full, and the taxable estate is £200,000, the chargeable estate would be £200,000 less £26,000 (balance of nil rate band) less RNRB £175,000, so nil.

Misteek

Jeremy535897 said:

As I said, the residential nil rate band may also be available. See:
https://www.gov.uk/guidance/inheritance-tax-residence-nil-rate-band

The £299,000 reduces the £325,000 nil rate band, yes. If the residential nil rate band is available in full, and the taxable estate is £200,000, the chargeable estate would be £200,000 less £26,000 (balance of nil rate band) less RNRB £175,000, so nil.

oh brilliant thank you so much !!. My final question  is... if lets say after the calculation it went  above by 40k (from fathers house) above the threshold   (as i approximated the 200k) ..obviousily there will be IHT due...

My questions are ... would that be due only for rhe siblings who inherited the fathers house and not my friend who was gifted the 299k property 3 yrs ago.

Lastly if they calculate 40%tax .. would it be only on the 40k that went over the limit. Or is it for the total house??

Jeremy535897

The tax would be borne by the estate according to the will, not by your friend. In the scenario you give, the tax would be on the £40,000 (the excess over the nil rate band and the residential nil rate band).

Misteek

Jeremy535897 said:

The tax would be borne by the estate according to the will, not by your friend. In the scenario you give, the tax would be on the £40,000 (the excess over the nil rate band and the residential nil rate band).

Thanks so much mate... hope your having a good day btw.

Just to clarify  as i understand it now. Only the people on the will need to pay the IHT minus the wife. But my friend will not. Also it depends if the RNRB applies as in some cases it wont be awarded fully, therefore  there maybe a higher IHT.

Not sure if anyone knows this but foes my friend need to fill a form and declare her gift? Would she need an accountant for it? Apparently he said his siblings are the executors. Didnt make sense.

Jeremy535897

Your friend does not need to complete a form.

Misteek

Thank you soo much im so glad people like you actually exist to help people.  Thanks so much x

Jeremy535897

No problem. When you said that the siblings are the executors, I can see that makes sense, as they inherit and may have their inheritance reduced by inheritance tax. Your friend presumably inherits nothing, so has no interest in the estate.