RNLB and NRB for Inheritance Tax

Al91

Hello,

I wonder if anyone clear up an issue I have...

My mother and father both have property assets under their names. My father has the main home that they both live in under his name and my mother has a investment property under her name.

Even though my mother does not have her name on the main home's title deed, she can still be entitled to the RNLB allowance only if they leave everything to each other and then the survivor leaves everything to the children?

So, for example, if the main home has value of about 500k and the investment property has a value of about 550k, then the INT liability on the second passing, will be on 50K.

RNLB = 175K x 2 = 350K

NRB   = 325K x 2 = 650K

                               --------

                              1,000K

Therefore INT on 1,050K - 1,000K = 50K

Am I correct in assuming this?

Thanks in advance

Keep_pedalling

Assuming they are married or in a civil partnership both RNRBs can be claimed as long as your father leaves the family home to her otherwise she will will never have been a home owner. If she die# first your father’s estate can still claim both RNRBs.

Why do they hold their properties this way? it would would be far simpler on the first death if they held them jointly.

Do they have wills and LPAs in place? If not both should be on the top of their to do lists. 

Al91

Thanks for the reply.

They are indeed married and do have wills that leave everything to each other.

The investment property is in her name due to historical reasons and it is a 'share' of the investment. Therefore adding my father's name to that title deed will be complicated.

For the main home, I guess it would make things simpler if her name was added to that title deed?

Newly_retired

Nobody can say what the IHT rules will be by the time they are of relevance to your parents.

Keep_pedalling

Do they also have lasting powers of attorney in place? Sometimes being incapacitated can cause far more financial headaches for your loved ones than your death, so financial LPAs are really a must have in your parents situation.