Renting and IHT

broju

My husband died very recently. I am awaiting probate and contemplating my future. Our total worth is over the 1 million mark including the current property. My husband left his share of everything to me.
I need to sell the current property as it's too much for me to maintain and I need to be nearer family.  I would chose to rent initially and may decide that's the best thing for me in the long term but would that mean the total IHT exemption on my death would be just £650? 
I would be very grateful for any advice! 

Keep_pedalling

Your estate will still be able claim both sets of RNRB if in the long term you continue to rent more suitable accommodation. If you choose retirement or sheltered housing type accommodation it is better to rent as those sort of properties can be very difficult to sell and can actually loose value. 

This might be a good time to look at gifting to have a chance of reducing your IHT liability.

getmore4less

Look up downsizing in relation to residential nil rate bands.

Do you have relevant beneficiaries to make use of residential nil rate band.

broju

Thank you both.
Yes, we started the gifting and I've continued that easily. We have two wonderful daughters with lovely Grandchildren!
It's contemplating the future that's so very difficult.
I have read the government website on downsizing and the RNRB suggested and the first part was reassuring.  But when I got to the examples my mushy brain got confused. I think my position is likely to be straightforward and fit into the first part. I will either buy a property, probably costing around £300,000, or rent, maybe a unit in a retirement 'village' although that has little appeal at present. Neither could be where I end my days but I would like any decision I make over the next year or so to be an informed one to ensure our daughters benefit as much as possible from our estate.
Any further comments, suggestions or advice would be most gratefully received!

Marcon

broju said:

Thank you both.
Yes, we started the gifting and I've continued that easily. We have two wonderful daughters with lovely Grandchildren!
It's contemplating the future that's so very difficult.
I have read the government website on downsizing and the RNRB suggested and the first part was reassuring.  But when I got to the examples my mushy brain got confused. I think my position is likely to be straightforward and fit into the first part. I will either buy a property, probably costing around £300,000, or rent, maybe a unit in a retirement 'village' although that has little appeal at present. Neither could be where I end my days but I would like any decision I make over the next year or so to be an informed one to ensure our daughters benefit as much as possible from our estate.
Any further comments, suggestions or advice would be most gratefully received!

If your husband died very recently, ploughing through a load of stuff on the gov.uk website probably isn't going to be top of your to do list. What might be worth doing as soon as you can face it is updating your own will - and your solicitor will be able to explain the complexities surrounding the 'downsizing addition' - hopefully in a way which clears a path through the fog of that complexity.

Robert_McGeddon

What Marcon said.

You don't need to rush into this.  Getting it right - for you - is more important than getting it done quickly.  Perhaps trawl some of the older forum posts and see if anything strikes a chord?  Or ask a question - many on here will be willing to help.