Transfer Inheritance Tax Allowance when one partner dies

Partons

My mum died in 2007 and all her assets passed automatically to her husband (my dad).  No forms where completed.

My Dad is still alive. However when sadly he dies will his inheritance allowance be £325000 x 2 = £650000.  I believe certain documents need to be sent to HMRC within 2 years of his death?

I'm thinking that because no documents where sent to HMRC when my mum died in 2007.  Her inheritance allowance is no longer available to her husband.

Would welcome any clarifications.

Jeremy535897

Your father's executor will complete form IHT 402:
https://www.gov.uk/government/publications/inheritance-tax-claim-to-transfer-unused-nil-rate-band-iht402
The full £325,000 will be transferable, so long as your mother made no non-exempt gifts in the seven years prior to her death.
There may also be a residential nil rate band available, plus a transferable RNRB from your mother.

Famau

I may be wrong here - but I believe that if all your mum's assets transferred only to your dad, then you don't need to complete the IHT402.  it's only if some of the assets were transferred to others - i.e., some of her £325,000 allowance was used up in bequests to other people and needs therefore to be accounted for and deducted from the 325,000.  So - if this wasn't the case, as you indicate, then no IHT402 is needed.

Jeremy535897

Famau said:

I may be wrong here - but I believe that if all your mum's assets transferred only to your dad, then you don't need to complete the IHT402.  it's only if some of the assets were transferred to others - i.e., some of her £325,000 allowance was used up in bequests to other people and needs therefore to be accounted for and deducted from the 325,000.  So - if this wasn't the case, as you indicate, then no IHT402 is needed.

Yes, I think you are correct:
https://www.gov.uk/guidance/transferring-unused-basic-threshold-for-inheritance-tax

Keep_pedalling

If his estate is under £650k his executors will not have to fill in any IHT forms, that will only be required if the estate is higher and the residential NRB is required. 

Neither the ability to claim the transferable NRB or RNRB is lost if no IHR return or probate was not required on the first death.

Partons

Okay thank you for explaining that.

So there was no need to complete any HMRC forms after my mum's death.  That needs to be done within 2 years after my Dad sadly leaves us.

Thanks

Keep_pedalling

Partons said:

Okay thank you for explaining that.

So there was no need to complete any HMRC forms after my mum's death.  That needs to be done within 2 years after my Dad sadly leaves us.

Thanks

No, on your father’s death you (assuming you are his executor) will need to apply for probate for his estate and if the estate is over £650k an IHT return. You do not have to submit anything regarding your mother’s estate because it was an exempt estate entirely covered by spousal exemption.

Partons

Right I've got it.

Thanks once again.

MetaPhysical

Yes you can.
My wife died in 2013.  Out of her 325k allowance she used 80k of it to transfer some of her/our estate to our son.  I then as her husband automatically retain 245k of her allowance and so I now have 570k of IHT "allowance".

An IFA told me I also retain this if I remarry as well - which I will be doing in 2026.  However my new wife will only inherit 325k of this if I then die.