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Where Taxpayers and Advisers Meet

IHT

mill
Posts:42
Joined:Wed Aug 06, 2008 3:42 pm
IHT

Postby mill » Sun Jul 24, 2016 11:26 am

A spouse has been left the totality of her late husband’s estate and as a consequence there is no liability for IHT. However her husband, well within the 7 years prior to his death, bought their son a property at a cost of £250,000.

Does this mean:

a) That the wife has an immediate liability of IHT on the £250,000 which she must pay from her inheritance, or

b) That on her death the wife’s double IHT allowance will be reduced by £250,000, or

c) That the “no tax between spouses rule” will eliminate all liabilities relating to the £250,000

LozaACCS
Posts:1504
Joined:Wed Aug 06, 2008 3:55 pm

Re: IHT

Postby LozaACCS » Sun Jul 24, 2016 8:58 pm

Assuming the gift to the son was the only gift,and that the NRB was 325K at the time it would have been a PET which fails on death, no IHT arises since the death estate does not exceed the NRB
The failed PET (less 2* 3000 AE) is 244K
The transferable NRB is therefore 244/325 =75% ie 244K

Lee Young
Posts:2707
Joined:Wed Aug 06, 2008 3:26 pm
Contact:

Re: IHT

Postby Lee Young » Mon Jul 25, 2016 12:30 pm

The transferable nil rate band is reduced to 25% (on the above figures) meaning (on current levels) £81,250. 75% of it is used up by the lifetime gift.
Lee Young
Solicitor, Chartered Tax Adviser and Trust and Estate Practitioner


Partner, Frettens LLP
lyoung@frettens.co.uk
01202 491701


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