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Where Taxpayers and Advisers Meet

Estimated IHT bill

kanrent
Posts: 68
Joined: Tue Dec 16, 2014 8:20 am

Estimated IHT bill

Postby kanrent » Mon Sep 07, 2020 7:21 am

Hi I have written a will leaving everything to my wife and daughter.
I am a non resident British citezen and UK domicile.
My daughter is a British citizen but not resident and not UK domicile.
My wife is 100% forign, (not UK resident and not UK domicile and not British citizen)
I intend to leave my UK house to my daughter which is currently rented out and has been for the last 20 years, before it was previously my home and my only property.
I will leave remaining cash to my wife.
The house is valued at £400,000
And the cash to my wife stands at £200,000
Can anyone advise what my IHT bill would be after my death
Thanks

AnthonyR
Posts: 321
Joined: Wed Feb 08, 2017 2:33 pm

Re: Estimated IHT bill

Postby AnthonyR » Mon Sep 07, 2020 11:48 am

Your gift to your wife is exempt under the spousal exemption (although as she is non-domiciled it is limited to £325,000 - although not relevant in your case as it's under the limit).

Your remaining gift to your daughter will be subject as follows:

Gift --- £400,000
Nil rate band (£325,000)
Residence nil rate band (£75,000)
Taxable - Nil

You qualify for the residence nil rate band as the property was formerly your home, so as long as your daughter inherits the property directly then you will get an additional relief of up to £175,000.

Bear in mind though if you are UK domiciled then you are subject to IHT on your worldwide assets, this would include any overseas assets/property/savings. Also bear in mind that if your wife passes away first and leaves any assets to you then these will fall into your estate and will be subject to UK IHT on your death.
Anthony Rogers LLB CTA TEP
Fusion Partners LLP
anthony@fusionpartners.co.uk

kanrent
Posts: 68
Joined: Tue Dec 16, 2014 8:20 am

Re: Estimated IHT bill

Postby kanrent » Mon Sep 07, 2020 6:12 pm

If I were to buy another property in the UK and leave that to my wife instead of the cash would the same apply
Regards

AnthonyR
Posts: 321
Joined: Wed Feb 08, 2017 2:33 pm

Re: Estimated IHT bill

Postby AnthonyR » Tue Sep 08, 2020 11:20 am

Yes - doesn't matter if it's property or cash that you leave to your wife.
Anthony Rogers LLB CTA TEP
Fusion Partners LLP
anthony@fusionpartners.co.uk


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