Inheritance tax not 600K ???

pennine

As a recently bereaved relative it has been brought to my notice by one of the executors of the will that the 600K limit does not apply as the first parent to die did so nearly 20 yrs ago, and has received paperwork from HMRC with a sliding scale involved. Is this correct info or has HMRC been sending out old information ?
Thanks

dzug

It's correct info - there is a sliding scale. But you may be misunderstanding how it applies.

It depends on how much of the then nil rate band was used on the death 20 years ago. If say 50% of it was used then, then 50% is available for use now. If none of it was used, then 100% can be used now.

So the limit in the first case is £300K (second death) plus 50% of £300K (remaining from the first death) - ie £450K total

In the second case it is £300K (second death) plus 100% of £300K (remaining from the first death) - ie £600K

pennine

I don't believe any of the nil rate band was used 20 yrs ago, so we should be OK at 600K then ?

sloughflint

pennine wrote: »

I don't believe any of the nil rate band was used 20 yrs ago, so we should be OK at 600K then ?

Do you understand what people are meaning by NRB being used?

I'm assuming that the first parent had an estate in which case the NRB would have been used somehow.
What dzug means is if 100% of the estate went to the remaining parent, then his/her NRB would be £600k.( 200% of £300k)
If 50% went elsewhere and remaining 50% went to the remaining parent then the remaining parent's NRB would be 150% of £300k.etc

Does that help?

sloughflint

It will be the executor's duty to find out how the first parent's estate was distributed and provide documents which have been listed on the last page of the IHT thread ( currently page 2)

pennine

Sorry must be having a senior moment, can't find IHT thread ?

fraser

http://forums.moneysavingexpert.com/showthread.html?t=487549