Inheritance Tax Allowances and NRB transfer

pollypussyfoot25

Would welcome clarification on NRB and transferable NRB.

My Mum and Dad owned a their home together (my Dad passed away in 1987).  My understanding is that my Dad’s NRB allowance wasn’t used so this can be transferred when Mum passes.  The NRB in 1987 was £71,000 .  As Mum is still in the same home, would IHT allowances work out as follows ?  

£325,000    NRB

£175,000  Residence nil rate band

+ £71,000  (NRB transfer)

Total allowances £571,000

Thanks in advance for any clarification.

Nomunnofun1

pollypussyfoot25 said:

Would welcome clarification on NRB and transferable NRB.

My Mum and Dad owned a their home together (my Dad passed away in 1987).  My understanding is that my Dad’s NRB allowance wasn’t used so this can be transferred when Mum passes.  The NRB in 1987 was £71,000 .  As Mum is still in the same home, would IHT allowances work out as follows ?  

£325,000    NRB

£175,000  Residence nil rate band

+ £71,000  (NRB transfer)

Total allowances £571,000

Thanks in advance for any clarification.

No - that is not correct. 

If none of your fathers allowance was used that means that 100% was not used and available to your Mum. 

But this 100% is applied to the CURRENT exemption and the transfer would actually be £325000.  There would also be an additional £175000 residence NIL rate band . That’s £1m in total - good news for you!

pollypussyfoot25

Quite a difference!

Many thanks : )

Brockyboy

Hi there - I think I’m possibly in a similar situation as you .
My Dad also died in 1987 - intestate , but everything went to Mum eventually as they were married .
Mum died in 2019 and left an estate valuing £630,000. My brother and I were left the house and as it was the family residence and,  as we were immediate next of kin then we were granted the £500,000 inheritance tax threshold and IT was paid on the remaining approx £130,000 amounting to £64,800 .
Nobody registered the NRB of my father when he died (I believe that it should have been done within 2 years of our fathers death ) and I don’t think the NRB transfer box was ticked on the probate / inheritance tax forms by the family friend , a retired accountant , who helped with all of this .
I’ve been in touch with HMRC and they’ve asked me to write in outlining the situation but I think that this is just a formality tbh .
I think discussing these matters on the phone and telling someone that “no you don’t have a claim “ would lead to people getting upset as it’s quite an emotional personal matter ….? I don’t know let’s see what they say but very interested if anyone has any similar experience or advice .

Nomunnofun1

Brockyboy said:

Hi there - I think I’m possibly in a similar situation as you .
My Dad also died in 1987 - intestate , but everything went to Mum eventually as they were married .
Mum died in 2019 and left an estate valuing £630,000. My brother and I were left the house and as it was the family residence and,  as we were immediate next of kin then we were granted the £500,000 inheritance tax threshold and IT was paid on the remaining approx £130,000 amounting to £64,800 .
Nobody registered the NRB of my father when he died (I believe that it should have been done within 2 years of our fathers death ) and I don’t think the NRB transfer box was ticked on the probate / inheritance tax forms by the family friend , a retired accountant , who helped with all of this .
I’ve been in touch with HMRC and they’ve asked me to write in outlining the situation but I think that this is just a formality tbh .
I think discussing these matters on the phone and telling someone that “no you don’t have a claim “ would lead to people getting upset as it’s quite an emotional personal matter ….? I don’t know let’s see what they say but very interested if anyone has any similar experience or advice .

Oh dear! That is not good! 

However, the deadline for the transferable NRB is two years from the date of your mother’s death, not your father’s - was a solicitor involved at that point?

Brockyboy

Yes a local solicitor would have dealt with my father dying intestate back in the late 80’s - would the application for NRB usually have been dealt with automatically at that time ? 

Thanks for your interest .

Nomunnofun1

Brockyboy said:

Yes a local solicitor would have dealt with my father dying intestate back in the late 80’s - would the application for NRB usually have been dealt with automatically at that time ? 

Thanks for your interest .

I think that you need to read my post again. 

There was no such ability to transfer NRB in 1987. 

The error occurred at the time of your mother’s death.