Help and advice on inheritance tax

Jeremy535897

I wonder if the confusion about "family" is arising from the fact that the property legacy to the stepdaughter would cause the RNRB to be available.

Basically, assuming no past gifts, and a legacy free of tax of a property worth say £250,000, then that property uses up £250,000 of the £325,000 nil rate band (or £650,000 if the husband predeceased her and left his assets to her) and the residuary estate pays tax based on the remaining nil rate band/residential nil rate band (which may also include some from the husband).

Millyalfie123

Thanks again everyone. I'm new to all this and just trying to figure it out for her. I'm suprised her solicitor hasn't told her any of this. I've told her to get another one as they are useless for her.

Yeah her husband passed all the assets to her. I will show her all of this so she can see it for herself. Then she can decided what she would like to do.

Thanks again

SiliconChip

While all the comments about the OP not having to pay IHT are correct the issue could be that if the IHT due on the estate is greater than the value excluding the two houses that the Will leaves to specified beneficiaries then the executors will need to sell either one or both of those houses to enable the shortfall to be made up. So the OP may not get the house as intended at all, and instead would get a proportion of its value. How this would be worked out to ensure fairness for both beneficiaries I have no idea. As previously mentioned it would probably be better if the Will just left percentages of the estate to each of the beneficaries and allow the executors to liquidate all assets before distribution.

lincroft1710

All the figures quoted apply to current IHT legislation. By the time your friend passes, this could easily have changed, so there is no point worrying about the figures at the moment

Albermarle

lincroft1710 said:

All the figures quoted apply to current IHT legislation. By the time your friend passes, this could easily have changed, so there is no point worrying about the figures at the moment

It is a good point, but the basic fact that the deceased persons estate pays the IHT, and not the beneficiaries, is not going to change.

lincroft1710

Albermarle said:

lincroft1710 said:

All the figures quoted apply to current IHT legislation. By the time your friend passes, this could easily have changed, so there is no point worrying about the figures at the moment

It is a good point, but the basic fact that the deceased persons estate pays the IHT, and not the beneficiaries, is not going to change.

I know, I repeated that the estate pays the IHtT in my first post on the thread. My point above was purely to tell the OP it was no use fretting about the amount of IHT the estate would have to pay based on current figures.