Inheritance on property question

[Voldo]

Hi,


My dad passed away in 1990. At the time he was married to my mum who inherited the house we live in. The house value now is around £700,000 at the moment. My mum never remarried. She only has 2 children, my sister and me. If my mum passes away, will we have to pay inheritance tax? I think all of my mum's assets are worth around £720,000 with the house being main asset.

Also if we do have to pay inheritance tax, what happens if we can't afford to pay it?

[Sam101]

With the inheritance tax allowance of your father and mother of £325,000 each and your mothers residential allowance of £175,000 there will be no inheritance tax to pay. Tax is usually paid from the estate within 6 months but you need not worry any more.

[Voldo]

Thanks for reply. I take it inheritance tax will only apply after the value of estate is over £825,000?

[Sam101]

That would seem to be correct, both inheritance tax nil rate bands and residential allowance

[sederunt]

There is also potentially an additional £175k TRNRB (transferrable residential nil rate band) available if needed. (£1million in total) All assumes that no NRB was/is used up by gifts etc.)

[Voldo]

Thanks guys for your help.