Inheritance tax query

Yorkie1

poseidon1 said:

Smudgeismydog said:

I was under the impression that deaths prior to the introduction of the RNRB would still qualify for the full allowance, as per HMRC guidance below, so the OP would have £1m available;


Any residence nil rate band (RNRB) that’s not used when someone dies can go to their spouse or civil partner’s estate when they die. This transfer can also happen if the first of the couple died before 6 April 2017, even though the residence nil rate band was not available at that time.

Where the first of the couple died before 6 April 2017 their estate would not have used any of the residence nil rate band as it was not available. So 100% of this tax-free allowance will be available for transfer unless their estate was worth more than £2 million and the residence nil rate band is tapered away.

Respectfully nothing in the HMRC residence nil rate band link you appended supports the contention that the death of the first spouse prior to April 2017 attracts the current full RNRB of £175k.

Indeed even for deaths after April 2017 the RNRB transferable may be less than £175k depending on when first spouse died. The RNRB Commenced  at £100k and rose in £25k annual increments to £175k as from 6 April 2020 where it has remained 'frozen'. Only 1st spouse deaths after 6 April 2020 attracts £175k.




As for pre 2017 deaths I refer you to  section 8(g) (4) Inheritance Tax Act 1984  (below)  which clearly sets out the £100k limitation.

https://www.legislation.gov.uk/ukpga/1984/51/section/8G#:~:text=[F18GMeaning of “brought,or after 6 April 2017.&text=(b)immediately before the other,person's spouse or civil partner

Admittedly this does not appear to be commonly understood.

I think you are incorrectly substituting the whole of s.8G(4) for the whole of s.8G(3).

What s.8G(4) actually seems to do is define what "the amount available for carry-forward from the related person's death" [i.e. the phrase used in in s.8G(3)(a)] means - subject to an upper limit calculation that is set out in s.8G(5).

You then continue to apply s.8G(3)(b) - (d) in the usual way.

Gruppe8

Thanks for the info Everyone, Yorkie1 could you please calculate the amount before i need to pay inheritance tax Thank You 

Yorkie1

Gruppe8 said:

Thanks for the info Everyone, Yorkie1 could you please calculate the amount before i need to pay inheritance tax Thank You 

Sorry, I can interpret some legislation but I really don't have those maths skills