Calculating inheritance tax threshold

H7pat1a

I am unclear on the inheritance tax threshold for my mum's estate. The estate is almost entirely in her house. Her will leaves everything split equaly between her 3 children ( all adult). Is the threshold 325000 or 500000 before 40% is charged? Thanks for help. I'm getting conflicting info on yhe amount of tax owed.

Tiglet2

H7pat1a said:

I am unclear on the inheritance tax threshold for my mum's estate. The estate is almost entirely in her house. Her will leaves everything split equaly between her 3 children ( all adult). Is the threshold 325000 or 500000 before 40% is charged? Thanks for help. I'm getting conflicting info on yhe amount of tax owed.

Did your mum have a spouse who died first?

polar_pig

It all depends.

Your mother has £325k Nil Rate Band (NRB) against her estate before IHT is due. She also has up to a £175k Residence Nil Rate Band (RNRB) that can be used if the house is being passed to direct descendants. Potentially making £500k total.

However if her spouse predeceased her, any of his unused NRB & RNRB might also be inherited by your mother and can be utilised upon her death. Noting that none of his NRB or RNRB are used when she inherits from her spouse. This potentially makes £1m total. However, some of his NRB may have been used if others inherited directly from her spouse.

Keep_pedalling

If your mother was never married or divorced with a house worth more than £175k then you can add the residential NRB to her NRB giving a total exemption of £500k. If she was a widow it could be double that.

H7pat1a

My mum was divorced 30 plus years ago, neve remarried.

polar_pig

If she didn't inherit from her spouse then it's limited to £500k.

H7pat1a

stuhse said:

Can i suggest you put all your questions into one thread, and delete the others. Just call it Mothers death- questions...

Thanks for suggestion. I'd rather have 3 distinct questions as 3 separate threads. Personal experience is that asking mote than one question just leads to confusion. Maybe it's just me at this difficult time but I'm finding everything a bit overwhelming 

Newly_retired

If I had seen this first, I would not have asked a question on another thread of yours.

H7pat1a

Tiglet2 said:

H7pat1a said:

I am unclear on the inheritance tax threshold for my mum's estate. The estate is almost entirely in her house. Her will leaves everything split equaly between her 3 children ( all adult). Is the threshold 325000 or 500000 before 40% is charged? Thanks for help. I'm getting conflicting info on yhe amount of tax owed.

Did your mum have a spouse who died first?

No. She was divorced