IHT question - historic property valuation

Nick_61

Hi all, hope someone can help me. My mother recently died & my sister & I are executors and sole beneficiaries of her estate which will exceed the £325k threshold. When her 2nd husband died in 2009 she was left a property ( and not much else of any value).
As they were married at the time of his death, am I correct in thinking that as well as my mum's £325k tax IHT free allowance, she would also get his allowance less the value of the estate that she inherited from him? If that is correct, am I right to assume that the property that she inherited would be valued as that of the time of his death & not when it was sold several years later? Finally, if that is correct, how do you put a historic value on a property at a particular point in time?
Thanks in advance  

Keep_pedalling

There is no need to get a historical value, the house would have been covered by spousal exemption and the only value you need is the value at the time of your mother’s death.

If he left everything to her then his full NRB can be transferred to her estate and you also have two residential NRBs that can be taken into account giving up to £1M of exemptions. 

RAS

Since mum was widowed and left assets to her children, her estate can claim residential and non-residential relief. 

Did step-dad leave anything of value to anyone other than your mother? Transfers to spouse do not attract IHT.

Unless step-dad left assets to anyone other than mum, the estate claims the Nil Rate Band for both him and mum, and the Residential Nil Rate Band for mum, up to the current value of £175k per person. That was introduced in 2017. 

Step-dad's 2009 NRB depends whether he died before or after 6 April.

What's the rough value of the estate

Nick_61

Thanks for the replies, I'll try and answer all questions here. Her 2nd husband died in Jan 2009. In his will there were some musical instruments & costume jewelry left to his kids but nothing of any value (probably £1.5k altogether). The house they lived in was in his name & was passed to my mum in his will. The house was the only thing of value in his estate. She lived in the house until 2019 when she sold it for £279K and bought a bungalow for £290K where she lived until 2022. This house was sold in 2022 for £368K to pay towards residential care home fees. So at the time of my mothers death, she didn't own any property as she had been a resident in a car home for over 2 years.
Hope this additional information helps.

Keep_pedalling

Nick_61 said:

Thanks for the replies, I'll try and answer all questions here. Her 2nd husband died in Jan 2009. In his will there were some musical instruments & costume jewelry left to his kids but nothing of any value (probably £1.5k altogether). The house they lived in was in his name & was passed to my mum in his will. The house was the only thing of value in his estate. She lived in the house until 2019 when she sold it for £279K and bought a bungalow for £290K where she lived until 2022. This house was sold in 2022 for £368K to pay towards residential care home fees. So at the time of my mothers death, she didn't own any property as she had been a resident in a car home for over 2 years.
Hope this additional information helps.

Her estate can claim all but £1.5k of the transferable NRB. If her estate exceeds £648.5k you can also claim her residential NRB and the transferable RNRB. 

Grumpy_chap

Nick_61 said:

Hi all, hope someone can help me. My mother recently died & my sister & I are executors and sole beneficiaries of her estate which will exceed the £325k threshold. When her 2nd husband died in 2009 she was left a property ( and not much else of any value).
As they were married at the time of his death, am I correct in thinking that as well as my mum's £325k tax IHT free allowance, she would also get his allowance less the value of the estate that she inherited from him? If that is correct, am I right to assume that the property that she inherited would be valued as that of the time of his death & not when it was sold several years later? Finally, if that is correct, how do you put a historic value on a property at a particular point in time?
Thanks in advance  

Nick_61 said:

Thanks for the replies, I'll try and answer all questions here. Her 2nd husband died in Jan 2009. In his will there were some musical instruments & costume jewelry left to his kids but nothing of any value (probably £1.5k altogether). The house they lived in was in his name & was passed to my mum in his will. The house was the only thing of value in his estate. She lived in the house until 2019 when she sold it for £279K and bought a bungalow for £290K where she lived until 2022. This house was sold in 2022 for £368K to pay towards residential care home fees. So at the time of my mothers death, she didn't own any property as she had been a resident in a car home for over 2 years.
Hope this additional information helps.

Sorry for your loss.

What made up the value of the Estate to exceed the £325k IHT threshold if the house (bungalow) was sold in 2022 for £368k to cover the care fees for your Mother?  Two years in a care home will have eaten quite a chunk of that.

If pretty much everything from the 2nd Husband was left to your Mother and she, in turn, left everything to OP plus Sister, is there a potential for the children of the 2nd Husband thinking they have any claim to any part of the Estate?

Nick_61

Thanks Grumpy Chap. Mum held onto her house when she moved in with her 2nd husband & rented it out. The property was sold in 2015 & any Capital Gains Taxes due were paid at this time. This is where the additional value comes from. Her 2nd husband had been estranged from his children for many years when he died.  

Keep_pedalling

What is the net value of her estate?

Nick_61

Keep_pedalling said:

What is the net value of her estate?

I guessing it'll be circa £480K

Keep_pedalling

Nick_61 said:

Keep_pedalling said:

What is the net value of her estate?

I guessing it'll be circa £480K

Well within the her NRB + his remaining transferable NRB, so no need to use either RNRBs which means you only need to apply for probate, no IHT return required. 

Nick_61

Thanks very much for your help Keep_Pedalling, RAS & Grumpy_Chap