INHERITANCE TAX - SPOUSE DIED 1971

Keep_pedalling

uknick said:

Keep_pedalling said:

The issue with deaths prior to 1974 is that there was no spousal exemption at the time, and the estate duty exemption at the time was £12,500 (£10,000 if the death occurred before 21st March). Any percentage of that not used at the time is transferable, so for example his estate was £6,250 and he died in April then 50% of the transferable NRB is available for your mother’s estate. The difficulty here is knowing what his estate was valued at all those years ago.

The transferable RNRB however is available regardless of the date of the death of her husband so if her house if worth  £675,000 or less there will be no IHT liability. If more than that then you are going to have to do some homework on establishing the value of his estate to be able to claim the available TNRB. If at the time it was simply 1/2 value of their home then that should not be too difficult. 

If you do need to claim either RNRB then you are going to have to do a full IHT return. 

Interesting re the pre 1974 death.  When you say 50% available, due you mean 50% of the current £325k is transferable.  

My father left circa £6k to my mother back in 1967 which, from what you say, should have given her about 50% extra NRB when she passed in 2022 which would have taken her estate out of IHT, even ignoring the RNRB.

When I spoke to HMRC a few years ago about this they said there was no NRB available from his estate as his death predated IHT.   Do you have a link I can use to go back to them?

Yes, I meant 50% of the current NRB. The link below explains it fairly well. It also points out an error in my original post, spousal exemption actually came in in 1972 but only for a limited amount.

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm43060

uknick

Keep_pedalling said:

uknick said:

Keep_pedalling said:

The issue with deaths prior to 1974 is that there was no spousal exemption at the time, and the estate duty exemption at the time was £12,500 (£10,000 if the death occurred before 21st March). Any percentage of that not used at the time is transferable, so for example his estate was £6,250 and he died in April then 50% of the transferable NRB is available for your mother’s estate. The difficulty here is knowing what his estate was valued at all those years ago.

The transferable RNRB however is available regardless of the date of the death of her husband so if her house if worth  £675,000 or less there will be no IHT liability. If more than that then you are going to have to do some homework on establishing the value of his estate to be able to claim the available TNRB. If at the time it was simply 1/2 value of their home then that should not be too difficult. 

If you do need to claim either RNRB then you are going to have to do a full IHT return. 

Interesting re the pre 1974 death.  When you say 50% available, due you mean 50% of the current £325k is transferable.  

My father left circa £6k to my mother back in 1967 which, from what you say, should have given her about 50% extra NRB when she passed in 2022 which would have taken her estate out of IHT, even ignoring the RNRB.

When I spoke to HMRC a few years ago about this they said there was no NRB available from his estate as his death predated IHT.   Do you have a link I can use to go back to them?

Yes, I meant 50% of the current NRB. The link below explains it fairly well. It also points out an error in my original post, spousal exemption actually came in in 1972 but only for a limited amount.

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm43060

Thanks for that.  After some searching I just found he estate duty rates for May 1967 when he died and it says there was a £10k allowance before tax was paid.  As 60% was used to transfer the estate to my mother, there should have been 40% to use against the current IHT NRB.

Looks like HMRC got it wrong again.

lincroft1710

uknick said:

Keep_pedalling said:

uknick said:

Keep_pedalling said:

The issue with deaths prior to 1974 is that there was no spousal exemption at the time, and the estate duty exemption at the time was £12,500 (£10,000 if the death occurred before 21st March). Any percentage of that not used at the time is transferable, so for example his estate was £6,250 and he died in April then 50% of the transferable NRB is available for your mother’s estate. The difficulty here is knowing what his estate was valued at all those years ago.

The transferable RNRB however is available regardless of the date of the death of her husband so if her house if worth  £675,000 or less there will be no IHT liability. If more than that then you are going to have to do some homework on establishing the value of his estate to be able to claim the available TNRB. If at the time it was simply 1/2 value of their home then that should not be too difficult. 

If you do need to claim either RNRB then you are going to have to do a full IHT return. 

Interesting re the pre 1974 death.  When you say 50% available, due you mean 50% of the current £325k is transferable.  

My father left circa £6k to my mother back in 1967 which, from what you say, should have given her about 50% extra NRB when she passed in 2022 which would have taken her estate out of IHT, even ignoring the RNRB.

When I spoke to HMRC a few years ago about this they said there was no NRB available from his estate as his death predated IHT.   Do you have a link I can use to go back to them?

Yes, I meant 50% of the current NRB. The link below explains it fairly well. It also points out an error in my original post, spousal exemption actually came in in 1972 but only for a limited amount.

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm43060

Thanks for that.  After some searching I just found he estate duty rates for May 1967 when he died and it says there was a £10k allowance before tax was paid.  As 60% was used to transfer the estate to my mother, there should have been 40% to use against the current IHT NRB.

Looks like HMRC got it wrong again.

£10K in 1967 was a huge amount of money, in the provinces it would buy 3 x 3 bed recently built semis.

uknick

lincroft1710 said:

uknick said:

Keep_pedalling said:

uknick said:

Keep_pedalling said:

The issue with deaths prior to 1974 is that there was no spousal exemption at the time, and the estate duty exemption at the time was £12,500 (£10,000 if the death occurred before 21st March). Any percentage of that not used at the time is transferable, so for example his estate was £6,250 and he died in April then 50% of the transferable NRB is available for your mother’s estate. The difficulty here is knowing what his estate was valued at all those years ago.

The transferable RNRB however is available regardless of the date of the death of her husband so if her house if worth  £675,000 or less there will be no IHT liability. If more than that then you are going to have to do some homework on establishing the value of his estate to be able to claim the available TNRB. If at the time it was simply 1/2 value of their home then that should not be too difficult. 

If you do need to claim either RNRB then you are going to have to do a full IHT return. 

Interesting re the pre 1974 death.  When you say 50% available, due you mean 50% of the current £325k is transferable.  

My father left circa £6k to my mother back in 1967 which, from what you say, should have given her about 50% extra NRB when she passed in 2022 which would have taken her estate out of IHT, even ignoring the RNRB.

When I spoke to HMRC a few years ago about this they said there was no NRB available from his estate as his death predated IHT.   Do you have a link I can use to go back to them?

Yes, I meant 50% of the current NRB. The link below explains it fairly well. It also points out an error in my original post, spousal exemption actually came in in 1972 but only for a limited amount.

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm43060

Thanks for that.  After some searching I just found he estate duty rates for May 1967 when he died and it says there was a £10k allowance before tax was paid.  As 60% was used to transfer the estate to my mother, there should have been 40% to use against the current IHT NRB.

Looks like HMRC got it wrong again.

£10K in 1967 was a huge amount of money, in the provinces it would buy 3 x 3 bed recently built semis.

Quite agree.  

rollyrat

I am in a similar position - my dad died in 1971 and my mum died in 2025. There is no property but her estate is worth about £365,000. Following the discussion above it looks as if my father's £10,000 NRB was not used at all, as he only left the contents of a rented council house to my mother and no savings. Am I correct in thinking that his full current NRB of £325,000 passes to her, so her NRB would now be £650,000? This would mean there is no IHT to pay. Has anyone got agreement from HMRC on this principle?

uknick

rollyrat said:

I am in a similar position - my dad died in 1971 and my mum died in 2025. There is no property but her estate is worth about £365,000. Following the discussion above it looks as if my father's £10,000 NRB was not used at all, as he only left the contents of a rented council house to my mother and no savings. Am I correct in thinking that his full current NRB of £325,000 passes to her, so her NRB would now be £650,000? This would mean there is no IHT to pay. Has anyone got agreement from HMRC on this principle?

Did you read this link?

IHTM43060 - Other issues: application when the first death occurred under Estate Duty and Capital Transfer Tax - HMRC internal manual - GOV.UK