IHT advice

ESmith02 · 15 May 2023 at 1:18PM

Hello there, Need some advice on IHT as I’m about to start the IHT400 form.

Parent 1 dies in 2003 intestate leaving a house worth £350,000. The house was left 50% (£175) to married spouse with a life interest and 50% (£175) to 3 sons.
There was IHT to be paid on the 50% left to Sons but as this was within the £255,000 threshold we didn’t have to pay.

Parent 2 dies in 2022 leaving a will that the same house as above now valued at £750 goes to the 3 Sons.
Am I correct in thinking that we can claim what is left of the remaining percentage of
Parent 1 threshold NRB which is about 30% of £325 (about (£100)
Parent 2 threshold NRB which is £325
Parent 1 and 2 RNRB £175 each (£350)
Total £775 which means no IHT to pay as house worth £750

Questions
I can’t find all the paperwork from Parent 1 probate except a crumpled Solicitors letter - do I need to provide this to HMRC?
Does the life interest for the spouse mean anything?
Is there a discount on IHT if one of the sons lives in the property as their main address. What is the form called if possible?

Many thanks

lisyloo · 15 May 2023 at 1:27PM

I would suggest you get professional advice probably from the solicitors who wrote the will.
We've just done something similar and we put it into probate as 2 estates (just granted) , but it may depend on how the trust is constructed and as executor I'd want professional advice on that size of estate even if for peace of mind (ours was a lot smaller).

I don't believe who lives in the house subsequently would make a difference.

Also be wary of CGT.
Any gain after the point of inheritance is chargeable to CGT.
The estate gets 1 allowance (not 3).
The housing market may not have gone anywhere since 2022 in your area.
There may be an option in the will for the 3 of you to inherit the property as opposed to the money.
If you think there is a gain and the will allows it you might be better off inheriting the property as then at least you'd have 3 capital gains tax allowances (and possibly 6 if you have spouses).

I am not an expert so you need to check everything I said, but it's there to spark avenues of research.