IHT calculation - confused

[MrUK]

Hi,

I'm a bit confused about NRB/RNRB and IHT calculations when there is property and cash involved in an estate.

In this example:

Married couple both resident/domiciled in UK.

Property in UK (main home) valued at £750k (joint ownership).

Total Cash of the couple is £500k ( 2 x £250k ).

No gifts made in last 7 years or historically by either party.

The married couple die together and the estate is assessed for IHT.

There is 1 beneficiary (daughter) - resident/domiciled in UK as a basic rate tax payer.

Would the liability to IHT be as follows ?

Estate value is £1.25m
NRB/RNRB combined £1m (£325k x 2 + £175k x 2)

IHT due is 40% of £250k (£1.2 - £1m) = £100k

Is this thinking correct in that the combined NRB/RNRB is £1m and can be used against all assets (property + cash) or does the NRB/RNRB only apply to main residential property being inherited by direct descendants ?

Any help appreciated.

Thanks

[AGoodman]

so long as an estate qualifies for the RNRB then it can be set against the whole but i fail to see why it would make a difference overall. Are you wondering about the instalment option?

Have you considered whether the daughter inherits both estates directly or via one of the parents? I cold only see it all coming directly if there is a provision to that effect in parents' wills but presumably jointly owned property will have to come via one of them.

[MrUK]

Hi AGoodman , thanks for your reply.

I was really just thinking about the RNRB and does it include both property ( main home ) and cash investments which it looks like it does. As you sa6 I’d RNRB applies then cash investments can be included under that allowance.

Many thanks