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How much nil rate IHT band will they get?

Wife passed away 35 years ago

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Man has an estate worth say £600k and still alive.  His wife passed away 35 years ago.

If she had passed away recently, then the exemption would be £650k so no issues.

How much exemption will available when he passes away- The £325k plus how mucg for his late wife?

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28th Nov 2018 17:09

HMRC's guidance on this is really good.

That's twice in one day I've said that, they're on a roll.

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By DJKL
28th Nov 2018 17:58

What, if any , percentage of her nil rate exemption was used following her death?

If none then 100% of the current allowance is available.

This applies even if first death predates IHT (came up re my father as my mother died in the 1970s and at some point will likely apply re my mother in law as her husband died pre IHT)

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By djn
to DJKL
28th Nov 2018 18:48

[quote=DJKL]

What, if any , percentage of her nil rate exemption was used following her death?

If none then 100% of the current allowance is available.

From what I've been reading it would be the rate in force at the time? She didn't use any of hers if she had any.
Although I can find no figures before 1988?

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By djn24
to DJKL
29th Nov 2018 13:22

DJKL wrote:

What, if any , percentage of her nil rate exemption was used following her death?

If none then 100% of the current allowance is available.

This applies even if first death predates IHT (came up re my father as my mother died in the 1970s and at some point will likely apply re my mother in law as her husband died pre IHT)


I've been told it's the rate at the time but can't seem to find the rate in 1982- can you point me to where I can find more info as I've searched but no luck?
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to djn24
29th Nov 2018 13:46

Were you told that by some random on an internet forum by any chance.

When I can't find (or don't know where to find or just plain don't understand ) legislation or statutory guidance, I usually do one of two things:
1) Just guess. I mean where's the harm.
2) Take paid for professional advice.

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By djn24
to Vile Nortin Naipaan
29th Nov 2018 14:13

Vile Nortin Naipaan wrote:

Were you told that by some random on an internet forum by any chance.

When I can't find (or don't know where to find or just plain don't understand ) legislation or statutory guidance, I usually do one of two things:
1) Just guess. I mean where's the harm.
2) Take paid for professional advice.

Nope by a tax consultancy firm- abbey tax.

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By DJKL
to djn24
29th Nov 2018 14:14

I suspect you misunderstood what they were saying.

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By DJKL
to djn24
29th Nov 2018 15:47

From To Threshold/nil rate band
6 April 1985 17 March 1986 £67,000
13 March 1984 5 April 1985 £64,000
15 March 1983 12 March 1984 £60,000
9 March 1982 14 March 1983 £55,000
26 March 1980 8 March 1982 £50,000

https://www.gov.uk/government/publications/rates-and-allowances-inherita...

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By DJKL
29th Nov 2018 14:13

"So you mean that if I inherited all the assets from my spouse or civil partner, my executors could add their nil rate band to the nil rate band that applies when I die?

Essentially yes – but it works by looking at what proportion of the nil rate band that was unused when your spouse or civil partner died and uprating the nil rate band available when you die by that same proportion.

What do you mean by uprating the nil rate band available by the same proportion?

The amount to be transferred is worked out by taking the proportion of the nil rate band that was unused on the first death and applying that to the nil rate band available when you die. So if your spouse or civil partner left assets worth £162,500 to your children with everything else to you and the nil rate band on their death was £325,000; one-half of their nil rate band is unused and is available for transfer. If, when you die, the nil rate band had increased to, say, £350,000, the amount available for transfer would be 50% of £350,000 or £175,000 giving your estate a nil rate band of £350,000 + £175,000, or £525,000 in total."

http://www.nlfm.co.uk/blog-post/all-you-need-know-about-transferable-nil...

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By djn24
29th Nov 2018 14:28

Ok that makes sense.

So as she passed away in 1982 she wouldn;t have used any band as it didn't exist.

Thank you for this.

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to djn24
29th Nov 2018 15:08

If it didn't exist, she's used all of it.

What you're looking for is here: https://www.gov.uk/government/publications/rates-and-allowances-inherita...

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to Tax Dragon
29th Nov 2018 15:36

Ordinarily, I'd have expected that to be useful. I have a gut feeling though that, in this case, the OP is pre-disposed towards misunderstanding it completely.

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By djn24
to Vile Nortin Naipaan
29th Nov 2018 16:04

Vile Nortin Naipaan wrote:

Ordinarily, I'd have expected that to be useful. I have a gut feeling though that, in this case, the OP is pre-disposed towards misunderstanding it completely.

Are you just here to be mean ? As none of your comments have been at all helpful.

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to djn24
29th Nov 2018 16:09

Maybe, but.... why do you think there was no tax on her death? Have you seen something?

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By djn24
to Tax Dragon
29th Nov 2018 16:23

Tax Dragon wrote:

Maybe, but.... why do you think there was no tax on her death? Have you seen something?

Everything passed to husband and no tax paid- son confirmed this.

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to djn24
29th Nov 2018 17:42

Which begs the question... why then do you care about what the nil rate band was??!

Hence Vile's meanness.

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By djn24
to Tax Dragon
29th Nov 2018 18:58

Tax Dragon wrote:

Which begs the question... why then do you care about what the nil rate band was??!

Hence Vile's meanness.

Quite simple really- I was under the impression that the wife's nil rate band at the time of her death was what would be used to add to the husbands on death. That's why I needed to know what the rate was at the time.

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to djn24
29th Nov 2018 19:05

Well, hopefully by now you have realised how wrong you were.

Don't worry, most accountants are useless at IHT, trusts, in fact anything that isn't business tax. With some you have to question their business tax knowledge too. Just hang around in this forum for half an hour, you'll see what I mean.

Best advice: buy in advice on matters that you don't know about.

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By djn24
to Tax Dragon
29th Nov 2018 19:43

Tax Dragon wrote:

Well, hopefully by now you have realised how wrong you were.

Don't worry, most accountants are useless at IHT, trusts, in fact anything that isn't business tax. With some you have to question their business tax knowledge too. Just hang around in this forum for half an hour, you'll see what I mean.

Best advice: buy in advice on matters that you don't know about.

I see it now. To be fair that's why I asked the question as I didn't know the answer.
Shame when some people feel it ok to be nasty to make themselves feel better/superior. I'm a big believer in saying nothing if I don't have anything nice to say, some others obviously don't.
Thank you for the helpful answers from some, really appreciated.

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to djn24
29th Nov 2018 20:03

To be fair, it was Vile first recommended taking paid advice. And that (imho) is the most sound comment in this thread.

In fact (also imho) you owe it to your client to do that. Chances are if you don't know something this comparatively basic in IHT terms, there's other stuff you may be getting wrong on this case.

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By DJKL
to djn24
29th Nov 2018 15:23

No, that is not correct. You have to look at who she left her estate to in 1982 . If on her death she left 100% to her husband then possibly none of the nil band at that time was used.

I think per undernoted article spouse exemption first reared its head circa 1972 at the end of Estate Duty and it carried on during the CTT regime I believe. (Cannot remember anything re CTT, I took a tax law half course as part of my degree in 1982-1983 and cannot remember any of it except the badges of trade and capital v revenue distinctions)

This article discusses issues re earlier deaths pre spouse exemption.

https://www.taxation.co.uk/articles/2010/01/20/19855/nil-rate-band-problem

Here is guidance from HMRC- you really need to read it or pass the matter to someone else.

"TNRB may be claimed where the surviving spouse or civil partner dies on or after 9 October 2007. For married couples, the first death can have occurred at any time before or after that date. So the relief applies where the first death occurred under Inheritance Tax, Capital Transfer Tax or Estate Duty and there was unused nil rate band. "

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm43001

Now I do know that per a very old copy of Tilley's Revenue Law, printed 1981, "A transfer of value by one spouse is an exempt transfer to the extent that the value transferred is attributable to the other spouse" (CTT regime) so if late wife left entire estate to husband that was likely exempt in 1982 . The book has a table stating the nil rate band was £50,000 as at 9.3.81. So there was a nil rate band, if it was not used whatever percentage not used is likely available.

This is why it is a good idea to persuade parents and in laws to retain estate paperwork re their late spouses. (no issue with my father as an ex trust solicitor, slightly trickier explaining to my mother in law )

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