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Selling family home inheritance Tax

My mother has just gone into a Care Home and the family home is now empty. I have EPA so was going to sell the home but wondered if the £175,000 property allowance would still apply for Inheritance Tax if the house is sold (would it be seen as cash).  The house is worth £325,000 and she has savings of £140,000. 
At moment no Inheritance Tax is payable, but if I sell the house and it becomes cash does that mean I would have to pay Inheritance Tax on £140,000?

Comments

  • BikingBud
    BikingBud Posts: 2,998
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    Why would inheritance tax be payable if your mother is still alive?

    Entry to a care home might lead to depletion of all assets before death.
    Your life is too short to be unhappy 5 days a week in exchange for 2 days of freedom!

    One can always make more money. No one who has ever lived can create more time.
  • Albermarle
    Albermarle Posts: 32,721
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    Was she married at some point, and if so is the  husband ( your Father) deceased? 
  • p00hsticks
    p00hsticks Posts: 15,145
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    AS far as I'm aware. the estate should still be entitled to the RNRB under the downsizing rules - read here. 
    How downsizing, selling or gifting a home affects the residence nil rate band - GOV.UK

    However, as Albermarle suggests, if she is a widow and was left all your fathers estate, then her estate would probable be able to make use of his NRB for IHT purposes, and so there would be no need on the figures you quote to use the RNRB. This woudl avoid having to do a full IHT return when the time comes. 

  • Keep_pedalling
    Keep_pedalling Posts: 23,501
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    The downsizing rule applies so if needed the RNRB will still be available if you sell her home.
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