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Help understanding inheritance tax.

Unsureme
Posts: 5
Joined: Wed Jul 26, 2017 11:44 am

Help understanding inheritance tax.

Postby Unsureme » Wed Jul 26, 2017 11:51 am

Hi.

My grandad recently died and has left a house and some money in his will to be shared equally between my dad, my brother and me. He was my dads father in law.

We think the property is worth about 325000 and there is also around 100k in savings.

As it was my dads father in law do we have to pay iht as i understand the new iht rules for the house apply to directly (blood) related family?

Thank you in advance.

maths
Posts: 6931
Joined: Wed Aug 06, 2008 3:25 pm

Re: Help understanding inheritance tax.

Postby maths » Wed Jul 26, 2017 7:57 pm

Assuming death on or after 6 April 2017 then the RNRB should in principle apply.

In short, no IHT should be payable on the estate of 425k.

Unsureme
Posts: 5
Joined: Wed Jul 26, 2017 11:44 am

Re: Help understanding inheritance tax.

Postby Unsureme » Wed Jul 26, 2017 8:05 pm

maths wrote:Assuming death on or after 6 April 2017 then the RNRB should in principle apply.

In short, no IHT should be payable on the estate of 425k.


Thank you maths. So even one relative is an inlaw?

maths
Posts: 6931
Joined: Wed Aug 06, 2008 3:25 pm

Re: Help understanding inheritance tax.

Postby maths » Wed Jul 26, 2017 10:47 pm

You and your brother are lineal descendants of your grandfather.

Your dad is not a lineal descendant of your grandfather.
However, if your mother died before her father then on the death of her father if he also left an interest in his residence to her surviving spouse (ie your dad) then the residence nil rate band is available for offset against calculating the IHT on grandfather's estate with respect to the interest left in the property to your father.

In short, the property worth 325k is left to the three of you and thus qualifies for the 100k residence nil rate band.

Transferable nil rate band and transferable RNRB may also be available to grandfather (but may not be needed).

maths
Posts: 6931
Joined: Wed Aug 06, 2008 3:25 pm

Re: Help understanding inheritance tax.

Postby maths » Wed Jul 26, 2017 10:50 pm

I have also assumed your father hasn't remarried.

Unsureme
Posts: 5
Joined: Wed Jul 26, 2017 11:44 am

Re: Help understanding inheritance tax.

Postby Unsureme » Thu Jul 27, 2017 9:24 am

maths wrote:You and your brother are lineal descendants of your grandfather.

Your dad is not a lineal descendant of your grandfather.
However, if your mother died before her father then on the death of her father if he also left an interest in his residence to her surviving spouse (ie your dad) then the residence nil rate band is available for offset against calculating the IHT on grandfather's estate with respect to the interest left in the property to your father.

In short, the property worth 325k is left to the three of you and thus qualifies for the 100k residence nil rate band.

Transferable nil rate band and transferable RNRB may also be available to grandfather (but may not be needed).



Thank you. You've made it very clear for me to understand. No, didnt remarry.
Many thanks for your help. Really appreciated.

Unsureme
Posts: 5
Joined: Wed Jul 26, 2017 11:44 am

Re: Help understanding inheritance tax.

Postby Unsureme » Sat Aug 12, 2017 9:34 pm

My brother moved into the empty property sometime after my Grandfather moved out to a care home, prior to my Grandfathers death. Will this this be affected/classed as gifts or anything? He is living there for free, effectively house sitting. I dont believe there should be any issues but just wanted a second opinion.
Thanks.

maths
Posts: 6931
Joined: Wed Aug 06, 2008 3:25 pm

Re: Help understanding inheritance tax.

Postby maths » Sun Aug 13, 2017 8:24 pm

As brother inherited a beneficial interest in the property he has the right of occupation; living there pre grandfather's death not a problem.

Unsureme
Posts: 5
Joined: Wed Jul 26, 2017 11:44 am

Re: Help understanding inheritance tax.

Postby Unsureme » Mon Aug 14, 2017 6:58 pm

Thank you maths. Very helpful again.


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