Will 28 day survivorship clause - inheritance tax

2stixoftwixes

My husband and I are just about to get our wills rewritten, where we leave everything to each other and then to our son

The new will (written by a solicitor) says 

for my husband *--* absolutely if he shall survive me by twenty-eight days but if this residuary gift should fail for any reason then"

I have just become aware that this could cause inheritance tax problems 

My husband has less than £325k Nil Rate Band

I have over the £325k Nil rate band

we jointly own a house (also to be left to our son) 

My understanding of IHT is that our NR Bands are added together to give my son a £650k threshold, but reading online a 28-day clause in a will can cause problems

If heaven forbid we die together, or within 28 days of each other, does our son then not get the £325k allowance added together

or even after if we didn't die close to each other (years apart) would it still affect this

Thanks 

Tiglet2

I'm not an expert, but the 28 day clause seems to be in most Wills.  I think it means that if one of you dies, the survivor will inherit as per the Will if they survive more than 28 days after the first death.  If the survivor doesn't live longer than 28 days after the first death, then the survivor would be considered to have died within the lifetime of the first death and the estate would then go to the next person named in the Will, i.e. your son.

Each individual has a £325k NRB allowance and if your Wills leave everything to each other, once you have both passed away (and the survivor hasn't remarried/changed the Will etc), your son would be able to claim the NRB allowance from you both, i.e. £650k altogether.  There would also be the Resident NRB of £175k for you and your husband, which your son (as a direct descendent) could also claim, bringing the total to £1m before any IHT is due.  

Could you clarify what you mean by you have more than the £325k band and your husband has less?  Has your husband already used up some of his allowance?

RAS

Are you severing the tenancy to protect your son's future interest against care fees and remarriage? And creating a life tenancy for the survivor?

2stixoftwixes

RAS said:

Are you severing the tenancy to protect your son's future interest against care fees and remarriage? And creating a life tenancy for the survivor?

don't know what we are doing yet, we need advice 

2stixoftwixes

 

Could you clarify what you mean by you have more than the £325k band and your husband has less?  Has your husband already used up some of his allowance?

No, my savings are a lot more than his

2stixoftwixes

Looks like I have found the answer

https://www.willwriters.com/blog/survivorship-clauses-in-wills-and-when-to-avoid-them/

whilst we have non-joint savings and 1 is over the £325k amount, we shouldn't have any survivorship clause in our will