Will we be eligable for 500 or 657k IHT allowance

Hello everyone, I need a bit of assistance / reassurance.

We moved in to look after my exceptionally elderly grandmother recently. (As she had run out of savings for a live in carer, and it was a natural breakpoint in our kids education to make the move)

Sadly she died a few weeks ago, and we have two executors doing what they need to do right now, however I'm a little concerned that i'm not entirely aware of what the IHT threshold will be.

As I understand it, the house will come to me, and aside from some premium bonds, and approx 3k in her bank account and the contents of the house being a few grand as well, that's pretty much everything.

Now I estimate the house to probably be worth about 500k, maybe a little bit less, maybe a little bit more. Here's where i'm confused as hell.

My grandfather who passed approx 13 years ago left everything to my grandmother, and now my grandmother has passed this to me. Does this mean the IHT threshold goes up to 625, based on the allowance of 125 would have passed from my grandad to my grandma, and then her 125k gets added on as well?

Or is it just the 500k?

Comments

  • If your grandfather left everything to your grandmother then there will be £650k nil rate band available (2 x £325k). There will also be 2 x £175k residential nil rate bands available, however if the estate does not exceed £650k then these will not be required.
  • Thank you! That puts my mind at ease!
  • Mothman said:
    If your grandfather left everything to your grandmother then there will be £650k nil rate band available (2 x £325k). There will also be 2 x £175k residential nil rate bands available, however if the estate does not exceed £650k then these will not be required.
    Not having to claim the residential NRB will  avoid the need for the executors to complete an IHT return.
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