Tweet
Hope you can help please.
My father got cancer in 2013 and put everything (house, shares and a car) in my mother's name as he thought she would outlive him and wanted to make things simpler in the event of his death.
My mother died the following year in August 2014. My father survived my mother and died in September 2019. I have since discovered that my mother, for reasons I don't know yet, used up £178,000 of her IHT allowance (325,000) so she has £147,000 to transfer to my father. My father now has 325,000 of his own allowance plus 150,000 as a main residence allowance totalling £475,000. So now my father has died, I gather from speaking to HMRC that all unused allowances (from my mother) are transferred and IHT is calculated on the second death of a married couple.
My calculations are based on my father's allowance of £325,000 nil rate band, £150,000 main residency and £147,000 from my mother totalling £622,000 .
As I understand, a married couple can double their allowance. My question is: as my mother died in August 2014, the main residence allowance was only introduced by George Osborne in 2017, would she still be entitled to the £150,000 and therefore increasing his allowance to £772,000?
HMRC said on 2 separate occasions with 2 different advisors that if you submit the IHT435 and IHT437 forms then "hopefully" the allowance will be allowed as, irrespective of my mother dying before the date it was introduced, the allowances are all calculated on the second death.
Does anyone know for sure what the case is.
My father's house is for sale at £750,000. His shares to the value of £70000 were transferred to me and my sister 7 months prior to his death.
If my mother's main residency allowance isn't taken account, we will be left with a IHT bill of about £80,000. If it's allowed we won't pay any tax.
What is more likely ?
Thank you in advance
My father got cancer in 2013 and put everything (house, shares and a car) in my mother's name as he thought she would outlive him and wanted to make things simpler in the event of his death.
My mother died the following year in August 2014. My father survived my mother and died in September 2019. I have since discovered that my mother, for reasons I don't know yet, used up £178,000 of her IHT allowance (325,000) so she has £147,000 to transfer to my father. My father now has 325,000 of his own allowance plus 150,000 as a main residence allowance totalling £475,000. So now my father has died, I gather from speaking to HMRC that all unused allowances (from my mother) are transferred and IHT is calculated on the second death of a married couple.
My calculations are based on my father's allowance of £325,000 nil rate band, £150,000 main residency and £147,000 from my mother totalling £622,000 .
As I understand, a married couple can double their allowance. My question is: as my mother died in August 2014, the main residence allowance was only introduced by George Osborne in 2017, would she still be entitled to the £150,000 and therefore increasing his allowance to £772,000?
HMRC said on 2 separate occasions with 2 different advisors that if you submit the IHT435 and IHT437 forms then "hopefully" the allowance will be allowed as, irrespective of my mother dying before the date it was introduced, the allowances are all calculated on the second death.
Does anyone know for sure what the case is.
My father's house is for sale at £750,000. His shares to the value of £70000 were transferred to me and my sister 7 months prior to his death.
If my mother's main residency allowance isn't taken account, we will be left with a IHT bill of about £80,000. If it's allowed we won't pay any tax.
What is more likely ?
Thank you in advance
