Our Dads estate and IHT implications

Rodders2409

Thanks all,

Sorry for the delay, I've had to sort dads stiff out and it's a bigger than I thought, physically.

I've started looking at the .GOV site and forms IHT435 and IH436 as suggested, it all looks fairly straight forward and I used the RNRB Calculator which gave me the available allowance as £350K.
This is because Mums allowance passed to Dads.....BUT.....because I need to use IHT436 I looked at it and it says there only a 2yr window from the deceased, to be able to transfer the allowance!....Mum passed away 5yrs ago and I'd expect most Spouses pass away more than 2 yrs before their other halves?

I'm probably missing something here......I hope.

Rodders2409

Oooooops....please ignore my last post, I'm an idiot 😊.....its two years after dad died, I miss read it.

Keep_pedalling

Rodders2409 said:

Thanks all,

Sorry for the delay, I've had to sort dads stiff out and it's a bigger than I thought, physically.

I've started looking at the .GOV site and forms IHT435 and IH436 as suggested, it all looks fairly straight forward and I used the RNRB Calculator which gave me the available allowance as £350K.
This is because Mums allowance passed to Dads.....BUT.....because I need to use IHT436 I looked at it and it says there only a 2yr window from the deceased, to be able to transfer the allowance!....Mum passed away 5yrs ago and I'd expect most Spouses pass away more than 2 yrs before their other halves?

I'm probably missing something here......I hope.

The 2 year limit to claim the transferable RNRB refers to the date of death of your father, there is no time limit on the death of the first spouse. 

shiraz99

TBH If the estate total is less than £825k I wouldn't bother with IHT436 and just fill out IHT435 for your father's RNRB allowance.

Rodders2409

shiraz99 said:

TBH If the estate total is less than £825k I wouldn't bother with IHT436 and just fill out IHT435 for your father's RNRB allowance.

Thanks Shiraz,

Dads total estate would be approx £673K and that's after I've confirmed with the Prudential that dads Bond is not a Pension so needs to be included in his estate.

I'd love to make it simpler, but it seems IHT435 has a section about TRNRB and says I need to complete the IHT436 form.

Can you advise why "less than £825K"?

Rodders2409

OK....I think I can answer my own question!

"less than £825"....because Dads allowance is £325 PLUS Mums unused allowance of £325K transfers to Dad = £650K
Plus Dads RNRB of £175K makes the £825K.......is that correct?

shiraz99

Rodders2409 said:

OK....I think I can answer my own question!

"less than £825"....because Dads allowance is £325 PLUS Mums unused allowance of £325K transfers to Dad = £650K
Plus Dads RNRB of £175K makes the £825K.......is that correct?

Yes, you don't need to use any inherited RNRB from your mum, so IHT436 is not required.

Rodders2409

Thanks All....

I've found / remembered two monetary gifts that Dad made to his Grand children via my brother and I, in the form of £17K each (£34K total) to be dished out equally to the 4 Grandchildren as and when. The gift was 2 years ago.

I'll be adding this into the IHT400 form I guess, but am I correct in thinking that we can claim a total of £6000 allowance against this?.....£3K for that year plus a one off £3K for unused gift allowance from the previous year?

That said, do I just ignore the £34K gift because there's soo much headroom with his allowance being £825K and his estate being £673K...??

Keep_pedalling

Rodders2409 said:

Thanks All....

I've found / remembered two monetary gifts that Dad made to his Grand children via my brother and I, in the form of £17K each (£34K total) to be dished out equally to the 4 Grandchildren as and when. The gift was 2 years ago.

I'll be adding this into the IHT400 form I guess, but am I correct in thinking that we can claim a total of £6000 allowance against this?.....£3K for that year plus a one off £3K for unused gift allowance from the previous year?

That said, do I just ignore the £34K gift because there's soo much headroom with his allowance being £825K and his estate being £673K...??

No don’t ignore it it goes down as one gift of £14k (£17-3k) and a second of £17k. If he did not use his previous year’s allowance you can take £6k off.

Rodders2409

Hello again.....I'm back!

Sorry, but things have taken a wee bit longer than I'd expected and there's a few new bits of information that I need to check on if that's OK. To summarise...

Mum passed away 5yrs ago leaving everything to dad. They had joint accounts & NS&I bonds that automatically transferred but she also had her own accounts that required Probate. Probate was granted and the Certificate advises net value of £82,485. All the funds were transferred to dads account.

Dad passed away at the end of October, his will leaving my brother and I as executors and equal recipient's of the estate.

We've had the property valued and it's higher than we'd thought (despite dads dodgy DIY!) plus we'd forgotten some of the financial gifts that mum and dad had given to grand children inside the 7 years before dad passed away.

So, I estimate the estate to be at £760K which is predominantly the house value.

Then there are the gifts within the 7 years which I have trawled through their bank statements and have come to a total of £230K, These payments were phased throughout the 7 years on an adhoc basis.

On this basis, my understanding is that we're just shy of the £1Million mark (which blows my tiny mind) with the total estate and gifts amounting to £990K. I guess it could go up if the property increases in value or the Bonds increase in value, making it pop over the £1M mark and needing IHT to be paid, but I've been realistic on the property sale and the state of the economy probably shifts things to a reduction in value rather than an increase. Therefore I'm looking to process the estate as not needing IHT and need to check I'm about to do it correctly.

The assumptions are that dad his £325K allowance and his £175 RNRB plus Mums transferable £325K allowance and her £175K TRNRB...making up the £1M total, but I have to complete the various forms to apply the transfers and detail all gifts etc... 

The forms I must completing are...

IHT400....do I need to complete this fully, even though it's under £1M, or are there sections I miss out?

IHT435...To use or transfer allowances, RNRB etc
IHT436... "
IHT402... "

IHT403 ...detail gifts made over 7 years.
                Do I need to detail specific dates and amounts etc?
                Because we're under the £1M does it really matter about the tapering and £3K allowance per annum?

IHT405...I'm assuming this isn't for 'extra' properties and for his own home, so I need to complete this?

IHT406...Bank accounts and premium bonds etc
IHT407...Personal bits and pieces like furniture etc, which there's not much of.
IHT411...Stocks and shares, which I'm assuming includes a Prudential Bond that dad had which is an equities based product. 

....and that's it, those are the only forms I'm completing.

Sorry for the war and peace but just like to double check with you fine people..😉