Inheritance Tax - Passing on Nil Rate Band to Spouse

Dilbert_Investor

My mum passed in August 2022, and now sadly my father has passed too.

I understand that her IHT nil band and residence nil band allowance can transfer to my father, but i cannot see how to do this.

Grateful for any pointers.

Keep_pedalling

It’s going to depend on the value of her estate. If it does not exceed £650k you don’t need to claim either RNRB and you will simply need to apply for probate. If it is over this value you will need to complete a full IHT return to claim either or both of the RNRB even if there is no IHT to pay. 

If you read through the IHT400 form you will see exactly which supplementary sheets are required.

https://assets.publishing.service.gov.uk/media/65a907fa94c997000daeb9e5/IHT400_English.pdf

Dilbert_Investor

Thanks.  So the basic nil rate of £325k transfers automatically, and my father will have £650k without the need to apply?

Keep_pedalling

Dilbert_Investor said:

Thanks.  So the basic nil rate of £325k transfers automatically, and my father will have £650k without the need to apply?

Not quite automatically, you will only have to apply for probate. The probate application asks if you are claiming the transferable NRB.

Dilbert_Investor

Thanks.  That’s when I’m doing the probate form for my dad. (Not something i should have done previously with my mums form back in 2022)?

Then, if the estate is over £650k I would need to apply for the extra residence allowance.

Keep_pedalling

Dilbert_Investor said:

Thanks.  That’s when I’m doing the probate form for my dad. (Not something i should have done previously with my mums form back in 2022)?

No, there was no need to do anything about her unused exemptions at the time.

Then, if the estate is over £650k I would need to apply for the extra residence allowance.

In that situation you will have to do a full IHT return (IHT 400 plus all the appropriate supplementary forms), which has to be done before applying for probate. 

Dilbert_Investor

Great, got that.  Thanks for your help