Inheritance Tax

[Gib88]

Hi i hope im posting in the right department. Im looking for some advice on inheritance tax , my father died back in 2014 and left everything to my mum , back in 2017 my mum was taking into care for dementia and died last year. I was currently renting out there house to help pay care fees the tenancy is now up so im currently looking at selling the property. The property is worth around £400,000 and understand that the threshold for tax is £325,000 but i have read online that there can be a main residence allowance of £150,000 im not quite sure if this applies. In my mothers will there are just me and my brother that the estate is left too. Could anyone shed some light on this please. Thanks alot really appreciate it.

[Law Student 2]

Hi, my condolences to you and your family.

Yes, you are right the main residence allowance gives an extra nil rate of 150,000 on top of the 325,000 for the 2020/2021 tax year. This means a total of*£500,000 that you pay a nil rate on. Therefore, you would pay no inheritance tax for the property if it is worth 400,000.*

To qualify for the main residence allowance the property needs to be a main residence and the recipient of the property must be a direct descendant. So you seem to have met the second requirement.

*As for the first requirement the gov website states "if the deceased’s interest in a residential property, which has been their residence at some point and is included in their estate, is left to one or more direct descendants on death". So you would seem to qualify for this as well. Here is the gov website link for further info.*https://www.gov.uk/government/public...-nil-rate-band

Hope this helps