Is there any inheritance tax to pay?

D2023

Hi, so confused, any help is much appreciated. The estate is worth approximately £875,000 and no will, so intestate. £270,000 plus half of remainder is inherited by spouse, so £572,5000, and £302,500 to children. As the £302,500 is less than the current nil band rate of £325,000 is there no inheritance tax to pay? Or is it 40% of £302,500 as the total estate value is over £325,000? 

Linton

Inheritance passed to spouse is tax free.  This is in addition to the allowance, so no tax is due. The spouse also “inherits” the unused part of the deceased’s £325k allowance.

Does the estate valuation include all or part of the family home?

D2023

Thanks Linton. I didn't realise but you are right, there will be some unused allowance.

It includes 2 rental properties but not the family home. As there is no tax payable I think we will not have to use IHT435 to claim the Residence Nil Band?