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Inheritance tax

Hi
Bit confused over Inheritance tax, and hoping some kind folk could help me. I have been told that a husband can leave spouse any amount of assets free from Inheritance tax, and vice versa. Does this mean their personal £325k and extra £175k allowances are transferable in total to spouses? On death of second person they could have tax free allowances of £500k (from death of first person) plus £325k of their own, with extra £175k if leaving residence to their children? This could mean tax free allowance of £1 million or £825k if no children involved?
Is this how it works? I fear i may be an executor for an aunt and uncle and want to make sure i pay the ITax correctly.
Thank you.

Comments

  • Keep_pedalling
    Keep_pedalling Posts: 20,567 Forumite
    Tenth Anniversary 10,000 Posts Name Dropper Photogenic
    The NRB will be transferable, the residential NRB could also be transferable, but the later exemptions are any available if they have direct descendants to leave their estate to. If they have never had children then their combined exemptions are £650k rather than £1M.
  • sweety
    sweety Posts: 171 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    So on death of first, the full £325k is allowed in entirety, regardless of total assets?
    on death of second, the total nil rate will be £650k and everything above this is 40%?
  • Marcon
    Marcon Posts: 14,186 Forumite
    Ninth Anniversary 10,000 Posts Name Dropper Combo Breaker
    sweety said:
    So on death of first, the full £325k is allowed in entirety, regardless of total assets?
    on death of second, the total nil rate will be £650k and everything above this is 40%?
    See https://www.gov.uk/guidance/transferring-unused-basic-threshold-for-inheritance-tax
    Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!  
  • Keep_pedalling
    Keep_pedalling Posts: 20,567 Forumite
    Tenth Anniversary 10,000 Posts Name Dropper Photogenic
    sweety said:
    So on death of first, the full £325k is allowed in entirety, regardless of total assets?
    on death of second, the total nil rate will be £650k and everything above this is 40%?
    Not quite, with all assets going to the spouse on the first death everything is covered by spousal exemption, so the NRB will not be used and an IHT return will not be required. On the second death the unused NRB on the first can be transferred to the estate of the surviving spouse. 
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