Inheritance Tax

Does anyone know this for certain:

I have an accountant telling me that inheritance tax allowance is applied for the year the person dies. I have a solicitor telling me it’s applied for the year you do the claim.

Some background. A man dies in 1995 and everything goes to his wife, no tax to pay. Wife dies 2018 so both tax allowances can be used. So far that’s easy. But what rate is used for the man’s part of the allowance?

It’s currently £325,000.00 plus a possible uplift. In 1995 the threshold was less.

Anyone know the right answer?

It’s complicated

My first reading suggests the opposite.

I’ll re read it more thoroughly.

Thanks for the link, I was clearly not framing the question right.

Your Google Kung Fu is superior

The best thing to do is sit down with HMRC and show them there is no inheritance as the monies have been invested in a Schuman wave generator from Nob Grail.


Looking at the actual form:

The transferable nil rate band is the amount at the original death.

But there may also be an additional inheritance death threshold, which both may get as long as a house is left to the kids:

Looking at the tax manual

The transferable nil band is the amount at the second death.

This seems to be in direct conflict to the form, so I have no fucking clue. I hate tax.

Thanks Adam. I’ve just spoken to the mate who’s dealing with this. He’s believing the solicitor as it’s better for him, he is executor and main recipient in the will. I’ve sent him the relevant links you’ve posted but he wants the solicitor to be right. I’ve told him it’s not clear cut.

When my mother died 7 years it was very easy

I had my own company for many years before I retired and I did all the tax stuff which was a breeze compared to this!!!

You can also call HMRC, they are generally helpful once you get through.

I just checked with the wife, who works in tax but not specifically IHT. She thought that it was the amount at time of original death, but wasn’t 100% sure. So nice and clear then!

It is a Daily Mail pleasing soundbite attempting to look like a policy, so no wonder it is a bit of a mess.

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Presactly. FFS. That’s how I keep reading it.

Problem is there’s around £50k riding on which way this falls.

I’ve read it all again (and more) and I’m now sure that it’s good news - her nil band is doubled, assuming that none of his was used. The tax manual is clear on this, and I think that the form agrees.

Print the form off and try it yourself.

Best to get advice.

All sorted now. Advice sought and acted upon

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