I'm trying hard to get my head around these new rules and wonder if anyone can help me with a couple of questions.
Mother died in 1990 and left 50% of family home to children. Father continues to live there, so he owns 50% and the children the other 50%. The house is worth £400,000 so father's share is £200,000. Father has other investments of approx £600,000.
I calculate potential IHT on father's Estate as follows: Total estate equals £800,000. (Property plus investments), minus NRB (£325,000) minus a further £200,000 (2 sets of RNRB) equals £275,000. 40% of this is £110.000. Is that right ?
As time goes by the RNRB goes up to eventually £175,000 per person, or £350,000 for a couple. Am I right in believing that as father's share in house is £200,000 currently then no extra RNRB can accrue ? If so - can father purchase the children's share of the property now, thereby increasing his share of value of property while decreasing his investments, though leaving his overall estate size the same. Will doing that allow by 2020 the full RNRB of £175,000 for mother and father thereby reducing the IHT liability ?
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