Inheritance tax

mick09

My dad died in1988 and left everything to my mum,I'm trying to sell mums bungalow to fund her private dementia care in a care home.my question is,if I sell the bungalow before mum passes and the estate is worth £400,000 would my inheritance tax be £325,000 or can I get the extra £175,000

RAS

The extra £175k applies to whether or not mum still owns the house at the time of her death. Does she have much by way on non-property assets?

Keep_pedalling

The residential NRB would be available but you won’t need it as your father’s NRB can be transferred giving her estate a £650k exemption without the RNRB.

Not using either RNRB avoids the need to file an IHT return so it is better to use the transferable NRB first.

mick09

RAS said:

The extra £175k applies to whether or not mum still owns the house at the time of her death. Does she have much by way on non-property assets?

No about £1000.00 as she is on end of  life care

macman

Do you already have POA to sell the property, assuming she is not able to give consent?

mick09

Yes,but that's only current until she passes

Mojisola

mick09 said:

RAS said:

Does she have much by way on non-property assets?

No about £1000.00 as she is on end of  life care

Would it be better to arrange a deferred payment scheme with the council and then let the executor sell the house after the inevitable happens?

mick09

Keep_pedalling said:

The residential NRB would be available but you won’t need it as your father’s NRB can be transferred giving her estate a £650k exemption without the RNRB.

Not using either RNRB avoids the need to file an IHT return so it is better to use the transferable NRB first.

Thanks for that,am I right in thinking it's forms iht400 and iht402? gave up ringing them after an hour

Keep_pedalling

mick09 said:

Keep_pedalling said:

The residential NRB would be available but you won’t need it as your father’s NRB can be transferred giving her estate a £650k exemption without the RNRB.

Not using either RNRB avoids the need to file an IHT return so it is better to use the transferable NRB first.

Thanks for that,am I right in thinking it's forms iht400 and iht402? gave up ringing them after an hour

No, the rules changed for deaths occurring after Dec 31st and it is much simplified if there is no IHT and you don’t need to use either RNRB. You only need to complete the probate forms, no IHT return required.

mick09

Ok,the estate is probably worth £400,000 hard to know as the property is not sold yet and maybe after probate as she is on end of life care

RAS

Regardless of whether its the house or the cash from the house, she retains both the NRB and RNRB providing the house being sold was her residence. And the allowances of her deceased husband.

If she dies before the house sells, use the simplified system as there is no IHT to pay. But be aware that your buyer may be facing mortgage offers running out etc. So you may have to start again.