Inheritance Tax question

cambb wrote: »

Hi,
My Grandfather recently passed away and i'm working through his estate and i have a question regarding his deceased spouse. His wife died in Feb 1997 and i believe the IHT was 200K. In the probate doc say she passed on 83k to my grandfather. His estate is worth 315k and a property worth 150k. Therefore with her unused IHT 117k + the 425k for him I wont be liable. Is that correct? Thanks

It does not work like that. If the £83k your GM left your GF was her entire estate then none of her nil rate band was used up, in which case all of her nil rate band can be transferred to his estate. This is based on percentage of the original nil rate band not the value as it was then, so the combined nil rate band will be £650k.

If she left any of her estate to anyone else then the amount of the nil rate band is reduced accordingly. So for example if she left you £20k that would have used uo 10% of her nil rate band so only 90% can be transferred.

Even if she used up her entire nil rate band by leaving £200k to others, you can use, the primary residents nil rate band (2x £100k) so there will be no IHT to pay if the bulk of his estate is going to his direct descendants.