Simple/Common IHT double-check

Azzab

Hi,

I have what I hope is a very simple and presumably MOST common situation that I’d like to double-check with you knowledgeable people 

Dad passed away about 3y ago now. He had a will leaving everything to his wife/my mum. He had very limited savings and nothing really of any major worth except the house, which my mum is joint tenant on. House is worth probably around £650k. 

So I did NOTHING with regards to IHT when he passed. 

My assumption is that when my mum passes that I then have to apply to transfer my dad’s unused IHT allowance over (a 402 form) to my mum, and she will have a threshold of £1mn in total. 

I doubt that the house and all/any belongings/savings will be worth more than that so, once again, it feels like I won’t have anything to do with IHT (aside from that unused claim)

Am I broadly correct here ?
To me this seems like it would be the most common scenario for people and yet finding this information out for yourself seems really difficult!

Thanks in advance. 

Albermarle

You have not said what your Mum's will says. Are we presuming it all passes to her child/children, including the house?

Azzab

Albermarle said:

You have not said what your Mum's will says. Are we presuming it all passes to her child/children, including the house?

Sorry, yes, the house would be left equally to us 4 children which of course would, in reality, mean we would probably sell it and split the money. 

Keep_pedalling

If at the time of your mother’s death her estate is under £650k you will not be required do an IHT return. If over that value you will also need to claim her residential NRB on top of the transferable NRB so a full IHT return will be needed. Of cause the rules may have changed by then.

What you do with the house does not effect the ability to claim the residential NRB.

Azzab

Thanks. So it’s very likely then, if nothing changes other than house prices going up as they usually do, then I’ll have to do a full IHT return to basically leverage the extra NRB, both her own and my fathers…