Hope to Check IHT

buddy9

poseidon1 said:

For clarity, since your father died pre 2017 ( when the residence nil rate band was introduced), you would be limited to £100k transferable from him ( this infor maybe of more use to others reading this thread).

For deaths before 6 April 2017, as there was no RNRB at that time, none can have been used. The brought-forward amount will be 100% of the residential enhancement in force at the later death of the surviving spouse or civil partner.

(from IHTM 46040)

poseidon1

buddy9 said:

poseidon1 said:

For clarity, since your father died pre 2017 ( when the residence nil rate band was introduced), you would be limited to £100k transferable from him ( this infor maybe of more use to others reading this thread).

For deaths before 6 April 2017, as there was no RNRB at that time, none can have been used. The brought-forward amount will be 100% of the residential enhancement in force at the later death of the surviving spouse or civil partner.

(from IHTM 46040)

Appears you did not read the HMRC guidance you supplied, carefully - see extract below

   ''The brought-forward allowance is calculated by reference to the unused percentage of the residential enhancement on the earlier death. Where that earlier death occurred before 6 April 2017 the residential enhancement at that time is deemed to have been £100,000 (IHTA84/S8G(4)).''  

Since you are the 2nd poster to make this error over the past couple of days, I  wonder if this is indeed  a commonly held misconception.  I also wonder if there is additional misunderstanding concerning  when the maximum transferable RNRB of £175k is in point, which in fact arises on 1st deaths occuring on or after 6 April 2020  - see end of thread below

https://forums.moneysavingexpert.com/discussion/comment/81475781#Comment_81475781

The confusion may relate to the fact that ordinary transferable NRB of £325k is potentially available where  1st deaths occurred prior to the introduction of IHT. However, very different rules relate to the transferable RNRB.

SoozyJ22

poseidon1 said:

buddy9 said:

poseidon1 said:

For clarity, since your father died pre 2017 ( when the residence nil rate band was introduced), you would be limited to £100k transferable from him ( this infor maybe of more use to others reading this thread).

For deaths before 6 April 2017, as there was no RNRB at that time, none can have been used. The brought-forward amount will be 100% of the residential enhancement in force at the later death of the surviving spouse or civil partner.

(from IHTM 46040)

Appears you did not read the HMRC guidance you supplied, carefully - see extract below

   ''The brought-forward allowance is calculated by reference to the unused percentage of the residential enhancement on the earlier death. Where that earlier death occurred before 6 April 2017 the residential enhancement at that time is deemed to have been £100,000 (IHTA84/S8G(4)).''  

Since you are the 2nd poster to make this error over the past couple of days, I  wonder if this is indeed  a commonly held misconception.  I also wonder if there is additional misunderstanding concerning  when the maximum transferable RNRB of £175k is in point, which in fact arises on 1st deaths occuring on or after 6 April 2020  - see end of thread below

https://forums.moneysavingexpert.com/discussion/comment/81475781#Comment_81475781

The confusion may relate to the fact that ordinary transferable NRB of £325k is potentially available where  1st deaths occurred prior to the introduction of IHT. However, very different rules relate to the transferable RNRB.

buddy is correct - the full £175k is available to transfer assuming no tapering. The transferable RNRB is based on the percentage unused of the first death which is always 100% if pre-April 2017 multiplied by the RNRB in effect at the time of the second death. 

I've explained in a bit more detail at https://forums.moneysavingexpert.com/discussion/comment/81478713/#Comment_81478713

also with an excerpt of IHT436 in this thread: https://forums.moneysavingexpert.com/discussion/6610486/rnrb-unused-query

poseidon1

Thanks @SoozyJ22 for your comprehensive  and responses.

Having now worked through the IHT436, do indeed concede that the relevance of the £100k threshold for pre 2017 first deaths is purely as the baseline for ascertaining the Residence Enhancement percentage for RNRB transferred on 2nd death.  Subject to any tapering for estates in £2m bracket,  appears the legislative intent is to ensure the transferable NRBs remain in sync.

Therefore apologies both to @buddy9 and @Smudgeismydog for having contradicted their responses on this point.

Smudgeismydog

poseidon1 said:

Thanks @SoozyJ22 for your comprehensive  and responses.

Having now worked through the IHT436, do indeed concede that the relevance of the £100k threshold for pre 2017 first deaths is purely as the baseline for ascertaining the Residence Enhancement percentage for RNRB transferred on 2nd death.  Subject to any tapering for estates in £2m bracket,  appears the legislative intent is to ensure the transferable NRBs remain in sync.

Therefore apologies both to @buddy9 and @Smudgeismydog for having contradicted their responses on this point.

Appreciated

MayDogsandCoffee

Thank you everyone for your input.  Probate has been granted, it was so straight forward so we are really pleased we went DIY and didn't pay thousands to a solicitor.  We are also under threshold which is a bonus.  

SoozyJ22

MayDogsandCoffee said:

Thank you everyone for your input.  Probate has been granted, it was so straight forward so we are really pleased we went DIY and didn't pay thousands to a solicitor.  We are also under threshold which is a bonus.  

That's great news, thanks for the update. How long did it take from applying for probate to getting it approved? I applied last week so just wondering what the best case scenario might be. 

MayDogsandCoffee

@SoozyJ22 My brother put it in but about 2 - 3 weeks, the will was not complicated.  The solicitor said it can take up to 16 weeks but I think that might be because they take longer to request info.