I don't understand inheritance tax

Toscaboy

I recently lost my husband, and I feel dreadful. I have been bombarded with correspondence from the authorities regarding tax payments.

I am entitled to a widows pension which means that I have to start paying tax.
I was my husbands unpaid carer for along time and I was a non tax payer.

A Letter from HMRC is asking for details of my husbands estate? 

Does this mean our home? Our property was in both our names and we finished our mortgage some time ago.

Im confused about inheritance tax, my husband left me with everything in his will and me the same to him.

I’m now worried that I will have to pay inheritance tax on our home? 

They ask about my husband’s savings but any savings are in an account which is in my name only not joint. 

There’s just a couple of thousand in my husbands joint account with me 
Can any one advise me please as I’m so worried at what to expect.
Grateful for your help and support xxx

bobster2

I'm sorry for your loss.

If you were married - and he left everything to you - then you won't be required to pay inheritance tax.

However, it's possible there could still be some of your husband's income tax issues to wrap up - e.g. did they pay too much or too little before they died. HMRC need to write to the representative of the deceased about this.

Keep_pedalling

Anything left to a spouse is covered by spousal exemption so you can forget all about IHT there will be none to pay regardless of the value of his estate.

Unless your husband was the beneficiary of a trust you wont have to complete an IHT return but because your husband died well short of the end of the financial year there is a good chance that he has over paid income tax so that they owe you money not the other way round. What exactly have HMRC asked for? Are you your husband’s executor?

It sounds like you will be receiving payment from a defined benefit type pension and if this is the case then the pension administrators will take care of any tax through PAYE. Are you aware what you are entitled to in regard to state pension? 

bunnygo

Sorry for your loss - and all this is the last thing you need. However...

1) as you were married, there's no inheritance tax to pay on anything left to you by your husband.

2) your husband's estate is anything in his sole name (which sounds like nothing), and half the value of joint assets. So half the value of the house and half the value of the joint account. Again, still no inheritance tax if everything came to you.

Did you use the 'tell us once' code? if so that will inform all the government departments and the council. That means you shoud now start getting 25% off your council tax. The pension company will sort out the tax payable, in conjunction with HMRC regarding any tax payable on any state pension. You don't need to do anything except check the letters as they come in, and answer any queries.

Otherwise, just contact the bereavement team at your bank - they will need to see your husband's death certificate, then the joint account will be moved to your name only. All your direct debits and standing orders will continue unaffected. You should also contact your house insurers to advise of the change of circumstances. At some point, you need to advise the land registry so that the house goes into your name only, but there's no hurry on that.

If there is a car insured in your husband's name, or with him as the keeper, you should also contact the insurers ASAP on that.