Inheritance Tax Understanding

PinkLady

Hello

Can I check my understanding of inheritance tax please.

If a single (divorced) person dies and leaves everything to their adult children does that mean the estate can be up to the value of £500k before inheritance tax is payable?

£325k + £175k (as the house is being passed to decedents)?

Is this still correct if the house is then sold  by the children?

Also is it enough that the will states something along the lines of I give all my property whatsoever and wheresoever to my children in equal parts.  It doesn't go into the detail of a house, savings etc?  

Thank you.  

poppystar

That would be the case assuming the value of the house is sufficient to create the £175k allowance. The children can then do what they want with the house. No detail breaking down the estate into house and savings etc is required for a Will. It’s actually better not to or at least not to identify the house by its address in case you have left it by the time of your death. 

theoretica

And the residence allowance is still claimable if the person downsizes or sells to move into care or similar.

Keep_pedalling

The will does not need to mention any property, as long as the estate contained a property or the downsizing rules apply the RNRB can be claimed. The house it is claimed against needs to be worth £175k or more to obtain the full exemption. If the house is worth less than that then the total exemptions  i= £325 + the value of the house.