IHT the basics

[dasmith]

Hi Forum

Mum and dad have a house £300k and other investments bank accounts etc £700k.

Mum died recently and will transfer all assets to dad.

Does that mean dad has mums IHT allowance eg £650k and if he dies there will be 40% tax to pay on balance of estate £350k.

Is there any IHT to pay now? and can dad make any tax free gifts now? any explanation on the system would be great.

Thanks

[pawncob]

Yes it means that dad gets two allowances, totalling £350k.

Explanations are here:http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/BeginnersGuideToTax/InheritanceTaxEstatesAndTrusts/index.htm

[pawncob]

Typo:
should be £650k

[Lee Young]

No IHT now and yes Dad can make gifts and if he survives 7 years, no IHT on those either. Or sit tight for a Tory government and await their promised higher nil rate band which may well just do the trick for your father?