IHT calc please

castle96

Hi, still can't get my head around this. Have done various on-line calcs. Your help please

Single 72
£450k house. No mortgage
£200k cash investments. No ISAs
£30k gifted to each of 3 sons 3.5yrs ago. No other gifts made, ever
Ignore car/contents, etc

Entire estate to be left to 3 sons, 1/3rd each

IHT liability = £?        TIA

Keep_pedalling

If you died tomorrow your inheritable estate would be £650k but for IHT purposes £734k (current assets plus gifts less £6k annual exemption). Your estate will have a nil rate band (NRB) of £325k and a residential NRB of £175k leaving £264k subject to IHT @ 40% giving a potential IHT liability of £105,600

if you don’t die in the next 3.5 years the gifts fall out of your estate and the tax liability drops to £60k, so keep breathing. 

[Deleted User]

Keep_pedalling said:

If you died tomorrow your inheritable estate would be £650k but for IHT purposes £736k (current assets plus gifts less £6k annual exemption). Your estate will have a nil rate band (NRB) of £325k and a residential NRB of £175k leaving £266k subject to IHT @ 40% giving a potential IHT liability of £106,400

if you don’t die in the next 3.5 years the gifts fall out of your estate and the tax liability drops to £60k, so keep breathing. 

734k - typo?

Keep_pedalling

[Deleted User] said:

Keep_pedalling said:

If you died tomorrow your inheritable estate would be £650k but for IHT purposes £736k (current assets plus gifts less £6k annual exemption). Your estate will have a nil rate band (NRB) of £325k and a residential NRB of £175k leaving £266k subject to IHT @ 40% giving a potential IHT liability of £106,400

if you don’t die in the next 3.5 years the gifts fall out of your estate and the tax liability drops to £60k, so keep breathing. 

734k - typo?

Yep now corrected. Still a big liability though 😬

[Deleted User]

Keep_pedalling said:

[Deleted User] said:

Keep_pedalling said:

If you died tomorrow your inheritable estate would be £650k but for IHT purposes £736k (current assets plus gifts less £6k annual exemption). Your estate will have a nil rate band (NRB) of £325k and a residential NRB of £175k leaving £266k subject to IHT @ 40% giving a potential IHT liability of £106,400

if you don’t die in the next 3.5 years the gifts fall out of your estate and the tax liability drops to £60k, so keep breathing. 

734k - typo?

Yep now corrected. Still a big liability though 😬

Yep. Downsize and give more away - keep breathing for longer!

castle96

Thanks. Why £6K, ISN'T IT £3K TO EACH PERSON?

[Deleted User]

castle96 said:

Thanks. Why £6K, ISN'T IT £3K TO EACH PERSON?

£3000 plus £3000 if previous years allowance not used. Can only go back one year. That’s per DONOR not Donee!

Keep_pedalling

castle96 said:

Thanks. Why £6K, ISN'T IT £3K TO EACH PERSON?

You said you had made no other gifts. Assuming the no other gifts means you have not been using your annual exemption you have £3k to carry over from the previous financial year.

castle96

you're confusing me. 734-325-175 = 234 x 40% = 93.6       ?

castle96

  ? the 734 is AFTER the 6 taken off.....no? so 234 x 40% = 93.6

My original confusion was due to the taperrelief business, butt his doesnt apply as my gifts are not over 325.....

[Deleted User]

castle96 said:

  ? the 734 is AFTER the 6 taken off.....no? so 234 x 40% = 93.6

My original confusion was due to the taperrelief business, butt his doesnt apply as my gifts are not over 325.....

You are correct on both counts. Apologies.