Inheritance Tax for people who've remarried

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Will try to read the flow later.

Transferable nil rate bands are claimable on multiple deseaced spouse up to 100%

Depending on dates there could be residential NRB in play.

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CheeseSpreadButties said:

I am joint executor, with one of my sisters-in-law, to my mother-in-law's will.  She is aged 91 and has Alzheimer's.  Her first husband, my wife's and her sisters' father, died in 1987.  She got remarried in 2003 to Jack, who's first wife died in 1988.  My mother-in-law kept her own house after she remarried.  When Jack died, his estate was shared equally among his three children and my mother-in-law and as far as I know, no Inheritance Tax was paid.  I don't know the value of Jack's estate, but it was probably in the region of £400k - £600k.  My mother-in-law's estate will be in the region of £200k - £300k, so the total value of her's and Jack's estates could be over the Inheritance Tax threshold.  Do the previous spouse's Inheritance Tax allowances also still count, therefore making the total allowance for all four people to 4 x £325k = £1.3m?

The estates are dealt with independently there is not really a joint allowance just potential transferable amounts which make it look like joint(transfer is only forward not back).

H1 died  1987  what happened to his estate? (nil rate band £71k or 380k)

H2(married 2003)   predeceased by W2.1,  what happened to her estate

H2 died ???? estate split between 3k kids and W2.2(MIL)  (need the numbers to track)


MIL has transferable residual NRB from H1(upto 100%) and the full RNRB from H1 as that could not have been used in 1987.

Total available £325k  + £0-325k +  £350k(limited by property values, not just current property down size rules) 

Then if needed there may be some transferable  from H2 death to top up the NRB(RNRB is max already)

When H2(Jack died his total  NRB, any NRB left over from W1(as %) + if died on or after 6 April 2017  some RNRB  
any thing transferred to MIL is exempt that leaves around 0.75 of £600k (£450k) which was probably fully covered by NRB leaving a bit to transfer to MIL.


if the estimate of up to £300k for MIL estate is good it is fully covered by her own regular NRB £325k

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Keep_pedalling said:

Jacks estate could very well have used the transferable NRB from his first wife, which would have avoided IHT on the size of estate you are talking about. There is is no available transferable estate available for your MIL but as her estate is well under her NRB it is not needed anyway.

https://www.morrlaw.com/wills-trusts-and-estate-administration/second-marriages-inheritance-tax-allowances/

There are potentially multiple transferable amounts, from both husbands

The full residential will definitely available as that could not have been used by H1.

There is good chance there will be regular transferable NRB from H1  and potentially some from H2 as 3/4 left to non spouse would be more than covered by H2 NRB and any transferred from their first wife 

depending when H2 died there was potential for them to have utilised RNRB as assets were left to direct dependants(maybe a previous property or cash from that using downsize rules)