Inheritance allowance amount when both parents pass

Brilley

Hi all, just trying to clarify something for my inlaws.

Parent 1 passed away 7 years ago, andd everything left to spouse. (Mainly a property worth circa £250k at the time and a small amount of cash). 

When parent 2 passes away they will have a total value of their estate of around £450k.

Am I correct in thinking that Parent 1's Inheritance allowance is given to the surviving spouse, so that on their passing the IT allowance will be £650k and there will not be any IT to pay on their estate?

Many thanks for any input...

p00hsticks

Yes, and in addition if their estate includes their residential property and is left to direct descendants, there are two additional 'residence nil rate band's of £175k available to take the total IHT allowance for the estate up to £1m. 

My understanding is that the Iatter can be claimed even if the deceased has had to downsize or sell the home to fund care home fees prior to their death. 

Brilley

..many thanks for taking the time to reply....much appreciated. I had googled the gov. website but it only seems to talk about the £350k allowance....

Marcon

Brilley said:

..many thanks for taking the time to reply....much appreciated. I had googled the gov. website but it only seems to talk about the £350k allowance....

A classic example of needing to know what to google on before you can actually get the info you need! We've all been there...

See https://www.gov.uk/guidance/inheritance-tax-residence-nil-rate-band which gives chapter and verse.