Inheritance tax planning

Geraldsprawnsandwich

My partner has assets of £800k including her share of our house she has 3 children she would like to pass this to equally. She is 60 years old and 16 years older than me. How would getting married assist her to reduce her childrens inheritance tax liability? If she died first would her children have the £650k allowance available to them? Any help would be greatly appreciated 🙏🏻

shiraz99

The transferrable allowances do not apply to unmarried couples I'm afraid. How is the house owned, are you joint tenants, tenants in common or just one of you named on the register? Also, can we assume you're not in a civil partnership either?

As things stand IHT will be applicable on your partner's assets after her death as there will be no spousal exemption for IHT.

p00hsticks

Geraldsprawnsandwich said:

My partner has assets of £800k including her share of our house she has 3 children she would like to pass this to equally. She is 60 years old and 16 years older than me. How would getting married assist her to reduce her childrens inheritance tax liability? If she died first would her children have the £650k allowance available to them? Any help would be greatly appreciated 🙏🏻

Would she be wanting you to have a life interest to remain staying in your home if she dies first ?

Is the house owned as joint tenants or as tenants in common ? (If the former then she doesn't actually have 'a share' and the ownership would go directly to you as the other joint owner on her death. She can only leave her share to people oif it is owned as tenants in common).

As I understand it, as shiraz99 says, the basic £325k nil rate allowance is only transferable between married couples, and then only if they leave their estate to one another. But she would have an additional £175k residential allowance if she leaves her property to direct descendants. 

Keep_pedalling

Getting married would make anything she left to you exempt from IHT and would help her estate if you died first. 

Do you also have children? Have you both got wills in place?

Frogletina

As I understand it, as shiraz99 says, the basic £325k nil rate allowance is only transferable between married couples, and then only if they leave their estate to one another. 

Can I check if this is correct? 

I was married when my husband passed away, but his will, of which I was executor, passed all of his assets, including his house, to our children.

From what I have read, I believe his unused nil rate allowance passes to me.

Geraldsprawnsandwich

Ok thank you- if we got married how would things change?
I have no children and our house is owned 50:50 as tenants in common 
thank you for help

Keep_pedalling

Geraldsprawnsandwich said:

Ok thank you- if we got married how would things change?
I have no children and our house is owned 50:50 as tenants in common 
thank you for help

Sorry to answer a question with another one, but who are you leaving your assets to on your death especially what happens to your assets if you die first and what is your net worth. 

Keep_pedalling

Frogletina said:

As I understand it, as shiraz99 says, the basic £325k nil rate allowance is only transferable between married couples, and then only if they leave their estate to one another. 

Can I check if this is correct? 

I was married when my husband passed away, but his will, of which I was executor, passed all of his assets, including his house, to our children.

From what I have read, I believe his unused nil rate allowance passes to me.

Did he leave less than the NRB to his children? If not there is nothing left to transfer.

shiraz99

Frogletina said:

As I understand it, as shiraz99 says, the basic £325k nil rate allowance is only transferable between married couples, and then only if they leave their estate to one another. 

Can I check if this is correct? 

I was married when my husband passed away, but his will, of which I was executor, passed all of his assets, including his house, to our children.

From what I have read, I believe his unused nil rate allowance passes to me.

Were you not Joint Tenants for the house? If so, how can you late husband pass the house on to your children, under the right of survivorship the house would automatically go to you, superseding what's written in the will. 

p00hsticks

Frogletina said:

As I understand it, as shiraz99 says, the basic £325k nil rate allowance is only transferable between married couples, and then only if they leave their estate to one another. 

Can I check if this is correct? 

I was married when my husband passed away, but his will, of which I was executor, passed all of his assets, including his house, to our children.

From what I have read, I believe his unused nil rate allowance passes to me.

Apologies, I worded that badly. You are correct in saying that as spouse you would inherit any unused nil rate allowance.

However, you get to the unused amount by deducting the value of the assets left to others. And I was rather assuming that these days, in most parts of the country, if those assets include property it is likely that most of it would be used up and there woudl be little/nothing left unused to transfer

Frogletina

Keep_pedalling said:

Frogletina said:

As I understand it, as shiraz99 says, the basic £325k nil rate allowance is only transferable between married couples, and then only if they leave their estate to one another. 

Can I check if this is correct? 

I was married when my husband passed away, but his will, of which I was executor, passed all of his assets, including his house, to our children.

From what I have read, I believe his unused nil rate allowance passes to me.

Did he leave less than the NRB to his children? If not there is nothing left to transfer.

Yes, total of estate was £204,000, and house was sold for £130,000