Nil Rate Band Legacy

LazyLuna

My late brother included a nil rate band legacy clause in his will, giting his only child (adult daughter) all of his inheritance tax nil rate band with the residue of his estate passing to his wife.  They were separated and my brother owned his own property outright (value c£300K).  As his sole executor can I claim for the £175K residence nil rate band to add to the £325K nil rate band, thus entitling my niece to £500K? Also I have read that you have to complete the full IHT400 to claim the residence nil rate band even though I believe there will be no inheritance tax to pay as the residue of the estate will be covered under spousal exemption.  Is this correct? Any advice greatly appreciated. Thank you.

Marcon

LazyLuna said:

My late brother included a nil rate band legacy clause in his will, giting his only child (adult daughter) all of his inheritance tax nil rate band with the residue of his estate passing to his wife.  They were separated and my brother owned his own property outright (value c£300K).  As his sole executor can I claim for the £175K residence nil rate band to add to the £325K nil rate band, thus entitling my niece to £500K? Also I have read that you have to complete the full IHT400 to claim the residence nil rate band even though I believe there will be no inheritance tax to pay as the residue of the estate will be covered under spousal exemption.  Is this correct? Any advice greatly appreciated. Thank you.

Depends entirely on the precise wording of the will, and possibly when it was written. I'd get some legal advice to ensure that if the wife objects to the daughter getting £500K (and using up her father's nil rate band, which the wife might otherwise have inherited on her death), as an executor you've covered your own back by getting proper advice at an early stage. Nothing said here is going to carry any weight with the wife.

Keep_pedalling

This sounds like a very old will, NRB trusts became virtually redundant after the transferable NRB came into effect in 2007, and he really should have made a new will we he got separated. 

Did they ever divorce? If not does he’s wife inherit everything over £325?