Inheritance tax - how much? And how to reduce?

Mountainbiking123

1. How much inheritance will be due 2. Unfortunately I have terminal cancer, is there anything I can do to reduce the tax on £500000 family house, wife died in 2001 and left £150000. I believe the allowance was £242000. I have  left £600000 in a bond half of which is outside of the Will, joint with son, I believe his half is outside will. I gifted £11000 in 2024 , I have £38000 in current account, £45000 in Isa, £30000 in bond. Sole beneficiary is son. 

Keep_pedalling

If your wife left her entire estate to you then your estate will have £1M of exemptions, 2x NRB and 2 x residential NRB. If any of her estate was left to others then her transferable NRB will be reduced on a percentage basis.

As you only seem to have made 1 gift of £11k, £6k of that will be covered by your annual exemptions. You can make a small saving by gifting another £6k now and another £3k on April 6th, but other than spending money on yourself there is little that can be done to reduce your estate now if it is actually over your total NRB allowances.

Was the bond set up in the last 7 years?

FlorayG

As far as I know there are only two ways to reduce inheritance tax;
1) spend it before you die
2) leave it to a charity
In your situation I would be doing number 1 and then not worrying about the rest. Many children inherit a LOT less that you are leaving, even after the IT is paid. DO some special (and expensive) things and take your son with you to enjoy them with you

Mountainbiking123

Keep_pedalling said:

If your wife left her entire estate to you then your estate will have £1M of exemptions, 2x NRB and 2 x residential NRB. If any of her estate was left to others then her transferable NRB will be reduced on a percentage basis.

As you only seem to have made 1 gift of £11k, £6k of that will be covered by your annual exemptions. You can make a small saving by gifting another £6k now and another £3k on April 6th, but other than spending money on yourself there is little that can be done to reduce your estate now if it is actually over your total NRB allowances.

Was the bond set up in the last 7 years?

Yes the bond was set up many years ago 

Albermarle

FlorayG said:

As far as I know there are only two ways to reduce inheritance tax;
1) spend it before you die
2) leave it to a charity
In your situation I would be doing number 1 and then not worrying about the rest. Many children inherit a LOT less that you are leaving, even after the IT is paid. DO some special (and expensive) things and take your son with you to enjoy them with you

You can also gift it, although you have to live 7 years afterwards.

Keep_pedalling

Mountainbiking123 said:

Keep_pedalling said:

If your wife left her entire estate to you then your estate will have £1M of exemptions, 2x NRB and 2 x residential NRB. If any of her estate was left to others then her transferable NRB will be reduced on a percentage basis.

As you only seem to have made 1 gift of £11k, £6k of that will be covered by your annual exemptions. You can make a small saving by gifting another £6k now and another £3k on April 6th, but other than spending money on yourself there is little that can be done to reduce your estate now if it is actually over your total NRB allowances.

Was the bond set up in the last 7 years?

Yes the bond was set up many years ago 

If only 50% of it forms part of your estate for IHT purposes, then it seems your entire estate escapes IHT.