Inheritance tax

montygggg

My FIL has bought a new property solely in his name after his wife passed away. Could someone advise how much IHT allowance he has. There is some confusion over whether you can take your deceased partners allowance with you to a new property solely in the surviving partners name. Thank you 

NorthYorkie

Did his wife own some or all of their home?
If so, what happened to her share on death?

montygggg

Yes they jointly owned the home they lived in. She passed away so her allowance went to my FIL but he has now sold that property and bought a smaller one. I am wondering if someone’s IHT allowance passes on to a new property even though they are now deceased. To make it simple does my FIL keep his deceased wife’s allowance even though the new property is solely in his name 

bunnygo

I think the downsizing allowance will help you here - looks like the £175k allowance from his late wife may apply.

https://www.gov.uk/guidance/check-if-you-can-get-an-additional-inheritance-tax-threshold

be aware that you will need to complete an IHT400, IHT435 and probably other schedules to claim these allowances, even if no IHT is actually due.

leoluka

Be careful: these rules about carrying over your late spouse’s nil-rate band (and how it applies after selling and re-buying property) can be tricky and very dependent on timing and ownership details.

Keep_pedalling

leoluka said:

Be careful: these rules about carrying over your late spouse’s nil-rate band (and how it applies after selling and re-buying property) can be tricky and very dependent on timing and ownership details.

In what way? The rules are fairly straight forward and I don’t see any problem in this case.