Wills

Keep_pedalling

monaymadlol said:

polar_pig said:

monaymadlol said:

Thanks for the clarification. So, to be clear, if a couple is unmarried or not in a civil partnership, we still have 325k in assets available to be passed on WITHOUT paying IHT? 

Our assets currently do not exceed 325k each and likely won't for a long while, but I suppose may do with pensions etc later on.

Yes, if unmarried or in a civil partnership you can pass on up to £325k to your partner without paying IHT. However, you will need to consider what happens after the second death. If unmarried any unused remainder of the £325k allowance is lost after the first death. The remaining partner inherits from the first, but after the second death there is only a single £325k allowance available and IHT is payable on the rest unless they use the RNRB or give to charity. 

As previously stated, your pension is outside of your estate and can be passed to your partner (or others) with an "Expression of Wish". The NRB doesn't apply to pensions and no IHT is payable, even if above £325k.

Thanks for that..so is anything else outside the NRB, or just pensions? What about physical assets and collectables, that would not be sold and just passed on, if they're not sold, they can not be taxed?

IHT applies to the whole estate, so yes your collectibles act will be included in the total value assessed for IHT, what assets are used to settle the tax bill is down to your executor. In some cases the entire estate may consist of non liquid assets so things need to be sold to meet an IHT bill before the estate can be distributed.

In your case even if no tax is due on the first death not being married or in a civil partnership could have a big impact on the second death because the first NRB will have been wasted.

monaymadlol

Keep_pedalling said:

monaymadlol said:

polar_pig said:

monaymadlol said:

Thanks for the clarification. So, to be clear, if a couple is unmarried or not in a civil partnership, we still have 325k in assets available to be passed on WITHOUT paying IHT? 

Our assets currently do not exceed 325k each and likely won't for a long while, but I suppose may do with pensions etc later on.

Yes, if unmarried or in a civil partnership you can pass on up to £325k to your partner without paying IHT. However, you will need to consider what happens after the second death. If unmarried any unused remainder of the £325k allowance is lost after the first death. The remaining partner inherits from the first, but after the second death there is only a single £325k allowance available and IHT is payable on the rest unless they use the RNRB or give to charity. 

As previously stated, your pension is outside of your estate and can be passed to your partner (or others) with an "Expression of Wish". The NRB doesn't apply to pensions and no IHT is payable, even if above £325k.

Thanks for that..so is anything else outside the NRB, or just pensions? What about physical assets and collectables, that would not be sold and just passed on, if they're not sold, they can not be taxed?

IHT applies to the whole estate, so yes your collectibles act will be included in the total value assessed for IHT, what assets are used to settle the tax bill is down to your executor. In some cases the entire estate may consist of non liquid assets so things need to be sold to meet an IHT bill before the estate can be distributed.

In your case even if no tax is due on the first death not being married or in a civil partnership could have a big impact on the second death because the first NRB will have been wasted.

Right, so say my valuables eg 50k worth, someone values them, then the executors needs to sel some of these or use the cash inheritance to pay the tax bill?

How does life insurance come into it? We have a policy meaning that if one of us dies, the provider pays off the remaining mortgage...so is this subject to tax too if above the threshold?

Keep_pedalling

monaymadlol said:

Keep_pedalling said:

monaymadlol said:

polar_pig said:

monaymadlol said:

Thanks for the clarification. So, to be clear, if a couple is unmarried or not in a civil partnership, we still have 325k in assets available to be passed on WITHOUT paying IHT? 

Our assets currently do not exceed 325k each and likely won't for a long while, but I suppose may do with pensions etc later on.

Yes, if unmarried or in a civil partnership you can pass on up to £325k to your partner without paying IHT. However, you will need to consider what happens after the second death. If unmarried any unused remainder of the £325k allowance is lost after the first death. The remaining partner inherits from the first, but after the second death there is only a single £325k allowance available and IHT is payable on the rest unless they use the RNRB or give to charity. 

As previously stated, your pension is outside of your estate and can be passed to your partner (or others) with an "Expression of Wish". The NRB doesn't apply to pensions and no IHT is payable, even if above £325k.

Thanks for that..so is anything else outside the NRB, or just pensions? What about physical assets and collectables, that would not be sold and just passed on, if they're not sold, they can not be taxed?

IHT applies to the whole estate, so yes your collectibles act will be included in the total value assessed for IHT, what assets are used to settle the tax bill is down to your executor. In some cases the entire estate may consist of non liquid assets so things need to be sold to meet an IHT bill before the estate can be distributed.

In your case even if no tax is due on the first death not being married or in a civil partnership could have a big impact on the second death because the first NRB will have been wasted.

Right, so say my valuables eg 50k worth, someone values them, then the executors needs to sel some of these or use the cash inheritance to pay the tax bill?

Basically yes, although most people’s chattels don’t have that sort of value and the executor does not need to use a professional valuation.

How does life insurance come into it? We have a policy meaning that if one of us dies, the provider pays off the remaining mortgage...so is this subject to tax too if above the threshold?

Whether the insurance policy falls into someone’s estate depends if it is written in trust or not. If it is, it falls outside the estate. This would not matter for a married couple but it is not something to be left to chance if you are not.