IHT exemptions

Yorkie1

If the OP's NRB is used to reduce the IHT on the gifts to the friends, does that mean that the wife (assuming she survives the OP) therefore can't benefit from it? And thus, instead of inheriting the OP's NRB which can be applied to her estate in due course, she wouldn't be able to use it on her estate?

Secret2ndAccount

Well, yes, otherwise you would be using the allowance twice! The allowances can be used at time of first death, or passed (in whole or in part) to the spouse for use at time of 2nd death.

squirrelpie

But her estate will be reduced by at least as much as has been used, so she's no worse off in IHT terms.

Secret2ndAccount

The couple gets to give away 650k before IHT. If he uses some of it then she can't use that part again.

Yorkie1

That's what I was thinking. It was just the OP's initial reference to leaving the wife £1m, which I thought might be based on an assumption that the wife might then have the full £1m relief / NRB / RNRB etc etc available to her estate. Wanted to clarify that for the OP in case that hadn't been part of their thinking.