Inheritance tax

retiredandskint

As I understand it Inheritance tax is payable after £325,000 unless it's a widow or widower''s property and it's left to children or spouse of said children then it's £500,000.  My father-in-law's estate is below the £500,000 threshold so can I start filling in the IT form without having all the final figures.  I've had a good offer on the house and want to proceed as quickly as possible.  I intend to do Probate myself as I'm both the named Executor and sole Inheritor.

p00hsticks

retiredandskint said:

As I understand it Inheritance tax is payable after £325,000 unless it's a widow or widower''s property and it's left to children or spouse of said children then it's £500,000. 

Are you absolutely sure about the 'spouse of said children' bit ?

According to the gov.uk website the additional £175,000 allowance is available if the property is left to

'your children (including adopted, foster or stepchildren) or grandchildren' - there's no mention of son-in-laws or daughter- in-laws

https://www.gov.uk/inheritance-tax/passing-on-home

however, if your mother-in-law predeceased your father-in-law and left everything to him then you can also make use of her £325,000 allowance so your have £650,000 to play with.  

retiredandskint

I read it somewhere and it mentioned spouse, typical I can't find it now.  To answer your question, yes, mother-in-law predeceased my father-in-law.  The inheritance will be more than the £325,000 but certainly less than £500,000.

retiredandskint

The person who died must have lived in the property at some point. Direct descendants include:

• children (including adopted, foster or stepchildren)
• grandchildren
• their children’s or grandchildren’s surviving spouse or civil partner

Nephews, nieces, brothers and sisters are not direct descendants.

It was on the The Check to see if you need to pay IT.

shiraz99

Use your MIL's inherited NRB first (if any), then the RNRB if you need to.

retiredandskint

Thanks for your replies.  Can I go ahead and fill in the form although I don't have final figures.  I have approx 95% of figures.

Keep_pedalling

retiredandskint said:

The person who died must have lived in the property at some point. Direct descendants include:

• children (including adopted, foster or stepchildren)
• grandchildren
• their children’s or grandchildren’s surviving spouse or civil partner

Nephews, nieces, brothers and sisters are not direct descendants.

It was on the The Check to see if you need to pay IT.

The HMRC manual confirms it.

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm46013

retiredandskint

Thank you for confirming 

shiraz99

retiredandskint said:

Thanks for your replies.  Can I go ahead and fill in the form although I don't have final figures.  I have approx 95% of figures.

What form are you referring to? Are you talking about the online estate valuation for IHT-  https://www.gov.uk/valuing-estate-of-someone-who-died/estimate-estate-value , or did your FIL die on or before 31 Dec 2021 and you're referring to form IHT205?

retiredandskint

It's the form you've given the link for.  My father-in-law died in April 2022.

diystarter7

Is the 175k  on the top of your main plus 325k if left as per op post?