A Multitude of IHT Questions

wyattjnr

Keep_pedalling said:

wyattjnr said:

RAS said:

Ok, think you need advice on this, as it's just possible you could claim the Residential Nil Rate. Someone who was a home owner who sold to downsize or go into care would get up to £175k allowance, depending on the value of the property sold. There may be other circumstances when they could claim this.

I think it has to be in the last 2-3 years for that allowance to help, so could be too late.

No, as long as it was after the 5th April 2017 (the RNRB came into effect on 6th of that month) it can still be claimed.

That's very interesting thank you.  I think our solicitor said something different. So she sold the house in Dec 2019 and had held it since 1992 in joint names with my father.  They divorced in 2019.  She passed in June 2024, so you think there is up to £175k RNRB on top of the £325k allowance?

Keep_pedalling

wyattjnr said:

Keep_pedalling said:

Sorry answer questions with more questions but was she a resident of the RoI or NI? If the former then her estate falls under the laws of the RoI which complicates things somewhat.

You say gifts were long ago so no records, but if there were in the last 7 years then they do form part of her estate and not declaring them would be a serious offence and could result in serious penalties including jail time. 

No, she was a resident of the UK still.
No the gifts were all years ago.

Thanks for the clarification. The gifts will have fallen out of her estate after 7 years so you can ignore those, but any inheritance she was due from her mother will be included even though that estate has not been finalised yet. 

In addition to the NRB the RNRB should also be claimable giving a total exemption of £500k plus funeral costs.

The costs you have been quoted are not excessive, but submitting the IHT return and applying for probate is within the capabilities for most people and apart from saving £7k you will almost certainly wind up the estate much faster.

Reducing IHT close to or after death is in most cases impossible, but if this inheritance is going to take your estate into IHT territory then you might like to consider a deed of variation to pass some of it to the next generation. This can be done anytime within 2 years of your mother’s death. 

EasySolution

If Grandma died in 2021 and Mother died this year then you will be able to claim Quick Succession Relief.so that the amount inherited from Grandma is not fully taxed twice

Keep_pedalling

EasySolution said:

If Grandma died in 2021 and Mother died this year then you will be able to claim Quick Succession Relief.so that the amount inherited from Grandma is not fully taxed twice

I had forgotten that one. Was her mother’s  estate in IHT territory?

wyattjnr

Keep_pedalling said:

EasySolution said:

If Grandma died in 2021 and Mother died this year then you will be able to claim Quick Succession Relief.so that the amount inherited from Grandma is not fully taxed twice

I had forgotten that one. Was her mother’s  estate in IHT territory?

No, there was I believe £150k worth of assets when my grandma died, so could that mean we don't pay IHT on that portion?

Keep_pedalling

wyattjnr said:

Keep_pedalling said:

EasySolution said:

If Grandma died in 2021 and Mother died this year then you will be able to claim Quick Succession Relief.so that the amount inherited from Grandma is not fully taxed twice

I had forgotten that one. Was her mother’s  estate in IHT territory?

No, there was I believe £150k worth of assets when my grandma died, so could that mean we don't pay IHT on that portion?

No, as there was no IHT to pay on your grandma’s estate QSR does not apply.

https://www.willpack.co.uk/what-is-quick-succession-relief/

wyattjnr

Keep_pedalling said:

wyattjnr said:

Keep_pedalling said:

EasySolution said:

If Grandma died in 2021 and Mother died this year then you will be able to claim Quick Succession Relief.so that the amount inherited from Grandma is not fully taxed twice

I had forgotten that one. Was her mother’s  estate in IHT territory?

No, there was I believe £150k worth of assets when my grandma died, so could that mean we don't pay IHT on that portion?

No, as there was no IHT to pay on your grandma’s estate QSR does not apply.

https://www.willpack.co.uk/what-is-quick-succession-relief/

So as the £150k goes down to my mums estate it gets added to the total figure and so as its all in total over the £325k it will get taxed?

Keep_pedalling

wyattjnr said:

Keep_pedalling said:

wyattjnr said:

Keep_pedalling said:

EasySolution said:

If Grandma died in 2021 and Mother died this year then you will be able to claim Quick Succession Relief.so that the amount inherited from Grandma is not fully taxed twice

I had forgotten that one. Was her mother’s  estate in IHT territory?

No, there was I believe £150k worth of assets when my grandma died, so could that mean we don't pay IHT on that portion?

No, as there was no IHT to pay on your grandma’s estate QSR does not apply.

https://www.willpack.co.uk/what-is-quick-succession-relief/

So as the £150k goes down to my mums estate it gets added to the total figure and so as its all in total over the £325k it will get taxed?

Yes, but you should also be able to claim her residential NRB under the downsizing rule which would take her exemptions up to £500k (assuming her share of the house was over £175k).

Was the house owned jointly or was it in just one name? If it was only in your father’s name you won’t be able to claim it.

wyattjnr

Keep_pedalling said:

wyattjnr said:

Keep_pedalling said:

wyattjnr said:

Keep_pedalling said:

EasySolution said:

If Grandma died in 2021 and Mother died this year then you will be able to claim Quick Succession Relief.so that the amount inherited from Grandma is not fully taxed twice

I had forgotten that one. Was her mother’s  estate in IHT territory?

No, there was I believe £150k worth of assets when my grandma died, so could that mean we don't pay IHT on that portion?

No, as there was no IHT to pay on your grandma’s estate QSR does not apply.

https://www.willpack.co.uk/what-is-quick-succession-relief/

So as the £150k goes down to my mums estate it gets added to the total figure and so as its all in total over the £325k it will get taxed?

Yes, but you should also be able to claim her residential NRB under the downsizing rule which would take her exemptions up to £500k (assuming her share of the house was over £175k).

Was the house owned jointly or was it in just one name? If it was only in your father’s name you won’t be able to claim it.

It was jointly owned with my father. But they divorced in 2019 too.  Ok so it looks like we only have the Resi NRB to fall back on.  Thank you for your help, its been incredible useful.

wyattjnr

wyattjnr said:

Keep_pedalling said:

wyattjnr said:

Keep_pedalling said:

wyattjnr said:

Keep_pedalling said:

EasySolution said:

If Grandma died in 2021 and Mother died this year then you will be able to claim Quick Succession Relief.so that the amount inherited from Grandma is not fully taxed twice

I had forgotten that one. Was her mother’s  estate in IHT territory?

No, there was I believe £150k worth of assets when my grandma died, so could that mean we don't pay IHT on that portion?

No, as there was no IHT to pay on your grandma’s estate QSR does not apply.

https://www.willpack.co.uk/what-is-quick-succession-relief/

So as the £150k goes down to my mums estate it gets added to the total figure and so as its all in total over the £325k it will get taxed?

Yes, but you should also be able to claim her residential NRB under the downsizing rule which would take her exemptions up to £500k (assuming her share of the house was over £175k).

Was the house owned jointly or was it in just one name? If it was only in your father’s name you won’t be able to claim it.

It was jointly owned with my father. But they divorced in 2019 too.  Ok so it looks like we only have the Resi NRB to fall back on.  Thank you for your help, its been incredible useful.

Sorry, I think I have one more question.  My Grandma's Will allowed for £5k to be left to each grandchild and there are 4 of us.  Does that money get taken out before its passed to my mum?  Therefore lowering the IHT cost.