Inheritance Tax and deceased spouse transfer

Theaks27

my widowed mum recently died leaving an estate of 335k. My dad died back in June 1985 and didn’t use any IHT allowance or capital tax allowance as it was then known. The rate for that year was 67k. Can I transfer the 67k to my late mums 325k so we don’t have to pay any IHT? There doesn’t seem to be a form to do this for when my dad died in 1985. Thank you. 

Marcon

Theaks27 said:

my widowed mum recently died leaving an estate of 335k. My dad died back in June 1985 and didn’t use any IHT allowance or capital tax allowance as it was then known. The rate for that year was 67k. Can I transfer the 67k to my late mums 325k so we don’t have to pay any IHT? There doesn’t seem to be a form to do this for when my dad died in 1985. Thank you. 

Step by step guide here: https://www.gov.uk/guidance/transferring-unused-basic-threshold-for-inheritance-tax

Keep_pedalling

You you can claim the full transferable NRB from your father’s estate the current level (£325k) No forms required other than ticking a box in the probate application. 

squirrelpie

Keep_pedalling said:

You you can claim the full transferable NRB from your father’s estate the current level (£325k) No forms required other than ticking a box in the probate application. 

That seems to contradict what the linked-to page says. Are you sure? And if so do you have a ink to confirm it?

Keep_pedalling

squirrelpie said:

Keep_pedalling said:

You you can claim the full transferable NRB from your father’s estate the current level (£325k) No forms required other than ticking a box in the probate application. 

That seems to contradict what the linked-to page says. Are you sure? And if so do you have an ink to confirm it?

I am 100% sure and if you reread that link (especially example 2) you will see that it does not contradict what I said. 

Theaks27

I called the tax office today and you can only transfer any unused IHT allowance if the person died after 1997. As my father died in 1985, we cannot transfer anything to my late Mums estate. 

DRS1

Theaks27 said:

I called the tax office today and you can only transfer any unused IHT allowance if the person died after 1997. As my father died in 1985, we cannot transfer anything to my late Mums estate. 

That doesn't sound right.  I don't think it matters when the first death was.

Could they have meant the date when your mother died?  Though 1997 doesn't sound right for that either

Triumph13

DRS1 said:

Theaks27 said:

I called the tax office today and you can only transfer any unused IHT allowance if the person died after 1997. As my father died in 1985, we cannot transfer anything to my late Mums estate. 

That doesn't sound right.  I don't think it matters when the first death was.

Could they have meant the date when your mother died?  Though 1997 doesn't sound right for that either

That definitely can't be right.  The IHT402 form to apply for the transfer of unused nil rate band gives specific instructions for how to fill the form in for deaths much earlier than that.

poseidon1

Hopefully the link below from HMRC's internal manual makes it abundantly clear the transferable NRB is available whenever the 1st death occurred. I doubt HMRC could make it clearer.

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm43001

You will note all prior iterations of IHT were covered ie Capital Transfer Tax and Estate Duty. The only real  limitation relates to civil partnerships, which clearly cannot apply to your parents.

Whoever you have been talking to at HMRC evidently don't know what they are talking about. The year 1997 in terms of IHT legislation has no relevance at all other than the NRB increasing from £200k to £215k. There was no other substantive IHT legislation arising from the 1997 Finance Act.

Refer them to their manual reference ihtm43001, to shut down this discussion so you can move on and use the 'excepted estate' criteria to obtain probate. In this regard be guided by this forum rather than confused probate officers.

Keep_pedalling

Only if the first death occurred before 12th November 1972 is there a problem with the transferable NRB. 

Before March 22nd 1972 there was no spousal exemption available so although everything may have been left to the surviving spouse at least some of it will have been used up. 

Between 22 March 1972 to 12 November 1974 spouse exemption was limited to £15,000 (the NRB at the time) so if the estate was higher than that then again at least some of the transferable NRB will have been used. 

From then on, the exemption for spouses who died domiciled in the UK was unlimited and you can deffinately claim it.