Inheritance tax question IHT400 or not?

rustwood

Sorry this is a basic question but I don't want to get this wrong!

My father died 19 years ago. The value of his estate was £239,575 and he consequently paid no Inheritance tax. His will passed on the house to my mother.

My mother recently died aged 100. She has no property, just cash, having sold hers and coming to live with me in my house for the past 15 years.   Her estate is valued at approximately £440,000

My question concerns the transferable allowance.  Is it £325,000 minus £239,575  ie £85,425
OR the whole £325,000. 

The difference drops me either side of needing to complete IHT400 or not.

Thanks in advance for any advice

Keep_pedalling

The transferable amount is based on the percentage used rather the allowance at the time of the first death and because his estate was covered by spousal exemption none of his NRB will have been used, so you can transfer it all giving you mum’s estate total exemptions of £650k. 

poppystar

You say his Will passed the house to your mother, just to be clear did everything go to his mother or did any cash or other assets pass to non spouse?

polar_pig

You said your father passed on the house to your mother. Did his whole estate get passed to your mother? If so, spousal exemption and transfer of NRB gives £650k total exemptions, as said. However, if part of his estate went elsewhere then there will be a deduction in his transferred NRB.