IHT Nil Rate Band question

HornetUK88

Keep_pedalling said:

DRS1 said:

Perhaps it would have been better for me to link these examples from Gov.uk

Thank you, it seems I have that wrong and you can claim the RNRB before applying the NRB so apologies for that. To do that however requires the executor to complete a full IHT return before applying for probate as it is the only way you can claim the RNRB. Not sure if that can be done if you have applied for and been granted probate already.

The solicitor has already done my dad's probate and it seems she used the £325k NRB and my mum had about £20k that added to her 325 NRB.

The solicitor thought she was adding the two 175 RNRB together but has now been told by HMRC mum can only use 290 her value of the house.

Have I lost £60k(350 has now become 290) of allowance due to the original way she did my dad's and not using his RNRB before she used the NRB?

Thanks to everyone for all the info to date.

Keep_pedalling

HornetUK88 said:

Keep_pedalling said:

DRS1 said:

Perhaps it would have been better for me to link these examples from Gov.uk

Thank you, it seems I have that wrong and you can claim the RNRB before applying the NRB so apologies for that. To do that however requires the executor to complete a full IHT return before applying for probate as it is the only way you can claim the RNRB. Not sure if that can be done if you have applied for and been granted probate already.

The solicitor has already done my dad's probate and it seems she used the £325k NRB and my mum had about £20k that added to her 325 NRB.

The solicitor thought she was adding the two 175 RNRB together but has now been told by HMRC mum can only use 290 her value of the house.

Have I lost £60k(350 has now become 290) of allowance due to the original way she did my dad's and not using his RNRB before she used the NRB?

Thanks to everyone for all the info to date.

The real reason you lost out was the lack of a IPDI trust clause in your father’s will. Was that drawn up by a solicitor? You may also have a CGT liability if the house sells at a higher price than the probate valuation on your father’s estate. 

Keep_pedalling

One other thought, as your father died less than 2 years ago you should be able to to make a deed of variation to get round this providing you have not already but his share of the house in your name.

HornetUK88

Keep_pedalling said:

One other thought, as your father died less than 2 years ago you should be able to to make a deed of variation to get round this providing you have not already but his share of the house in your name.

Hi no house is still being sold and is not in my name.  Thanks 

So has the solicitor made a mistake not using RNRB for dads estate first or it's just how things work?

Keep_pedalling

HornetUK88 said:

Keep_pedalling said:

One other thought, as your father died less than 2 years ago you should be able to to make a deed of variation to get round this providing you have not already but his share of the house in your name.

Hi no house is still being sold and is not in my name.  Thanks 

So has the solicitor made a mistake not using RNRB for dad’s estate first or it's just how things work?

Unlike the standard NRB which is automatically allocated, you have to actively apply for the RNRB by filing an IHT return which in this case was not strictly necessary in order to obtain probate which could be easily overlooked if you were not aware of the value of the surviving spouse’s estate. Most solicitors are also not tax experts.

If necessary you could do a deed of variation giving up your inheritance from your father to your mother. This would stop any of his NRB being used up and giving her estate the full £1M I. Exemptions, assuming he had made note non exempt gifts in the previous 7 years. 

What is the total value of your mother’s estate excluding your father’s share of the property?