Help please IHT Checker.

dw1964

My dad died nearly 20 years ago and passed everything to mum. Mum has now passed away and I’m trying to figure out her estate.

 I am using the government web site "Check if you need to pay IHT” and I’ve come to the question "What was the value in pounds of any tax-free allowance the person who died inherited?"

 Is this where i put in the 325000 that was passed from Dad to Mum.

 Any other tips would be most appreciated to help me understand this.

  Thanks for every ones help.

Keep_pedalling

What is the total value of your mother’s estate? 

dw1964

Keep_pedalling said:

What is the total value of your mother’s estate? 

Thanks haven't worked it all out yet, But i believe it will be around the 500 to 600 Thousand. Definitely over the 325000.
Thanks.

Keep_pedalling

dw1964 said:

Keep_pedalling said:

What is the total value of your mother’s estate? 

Thanks haven't worked it all out yet, But i believe it will be around the 500 to 600 Thousand. Definitely over the 325000.
Thanks.

If it is under £650k then there will be no IHT and you won’t need to file an IHT return as you will have her NRB to use plus the full transferable NRB from his estate.

If it is over £650k then you should be able to avoid IHT by using her residential NRB although that will require you to do an IHT return. 

Jowwie

Not an expert so experts please do correct me if this is wrong! If he died 20 years ago there may only be ~£250k available to transfer rather than £325k.

This states you need to use the rate in effect at the time of first person passing

https://www.gov.uk/guidance/transferring-unused-basic-threshold-for-inheritance-tax

and here are the historical thresholds

https://www.gov.uk/government/publications/rates-and-allowances-inheritance-tax-thresholds-and-interest-rates/inheritance-tax-thresholds-and-interest-rates

As keep_pedaling mentions you may also have use of the property allowance depending who it has been left to.

poppystar

Jowwie said:

Not an expert so experts please do correct me if this is wrong! If he died 20 years ago there may only be ~£250k available to transfer rather than £325k.

This states you need to use the rate in effect at the time of first person passing

https://www.gov.uk/guidance/transferring-unused-basic-threshold-for-inheritance-tax

and here are the historical thresholds

https://www.gov.uk/government/publications/rates-and-allowances-inheritance-tax-thresholds-and-interest-rates/inheritance-tax-thresholds-and-interest-rates

As keep_pedaling mentions you may also have use of the property allowance depending who it has been left to.

If you look at the examples in that link they show it is the percentage of the threshold that is used that is considered not the absolute amount. That is then applied to the current rate. So if 100% is still available regardless of the threshold in place  at time of death of the first spouse then it is 100% of the threshold at current levels that is available. …and someone correct me if I’ve got that wrong too!  

Keep_pedalling

Jowwie said:

Not an expert so experts please do correct me if this is wrong! If he died 20 years ago there may only be ~£250k available to transfer rather than £325k.

This states you need to use the rate in effect at the time of first person passing

https://www.gov.uk/guidance/transferring-unused-basic-threshold-for-inheritance-tax

and here are the historical thresholds

https://www.gov.uk/government/publications/rates-and-allowances-inheritance-tax-thresholds-and-interest-rates/inheritance-tax-thresholds-and-interest-rates

As keep_pedaling mentions you may also have use of the property allowance depending who it has been left to.

The transferable NRB is based on the current value. If some were used up it is calculated on the percentage used.

For example if £25k was used when the allowance was £250k, then the TNRB would be reduced by 10%, so £325k would be reduced by £32.5k to £292.5k 

dw1964

Keep_pedalling said:

dw1964 said:

Keep_pedalling said:

What is the total value of your mother’s estate? 

Thanks haven't worked it all out yet, But i believe it will be around the 500 to 600 Thousand. Definitely over the 325000.
Thanks.

If it is under £650k then there will be no IHT and you won’t need to file an IHT return as you will have her NRB to use plus the full transferable NRB from his estate.

If it is over £650k then you should be able to avoid IHT by using her residential NRB although that will require you to do an IHT return. 

Ok Thanks. Think I'm understanding this better.
So I value the estate lets say its worth less than the 650000.
Then apply for grant of probate. Haven't seen the forms for that yet, But I'm presuming there is somewhere to enter a value of the estate ?

Thanks again, All very helpful.

Sarahspangles

dw1964 said:

Keep_pedalling said:

dw1964 said:

Keep_pedalling said:

What is the total value of your mother’s estate? 

Thanks haven't worked it all out yet, But i believe it will be around the 500 to 600 Thousand. Definitely over the 325000.
Thanks.

If it is under £650k then there will be no IHT and you won’t need to file an IHT return as you will have her NRB to use plus the full transferable NRB from his estate.

If it is over £650k then you should be able to avoid IHT by using her residential NRB although that will require you to do an IHT return. 

Ok Thanks. Think I'm understanding this better.
So I value the estate lets say its worth less than the 650000.
Then apply for grant of probate. Haven't seen the forms for that yet, But I'm presuming there is somewhere to enter a value of the estate ?

Thanks again, All very helpful.

Save or print out the IHT checker - while you don’t need to submit this, the numbers it generates need to go into the Application for Probate, and it’s a partial record of your calculations.  The probate form is online, you can save and come back to your work multiple times before you submit, at which point you pay the fees.