The Lemon Fool

I have tried understanding this from the gov site, but failed. It's probably a very simple answer, so the information below is brief, but I can provide more details if necessary.

Mrs A and Mr A married. (over 60 years)
Mrs A died a couple of years ago. The value of the joint estate was almost exactly £650k, so her half £325k.
Everything (barring a few small gifts totaling £20k) was passed to MR A, no inheritance tax paid.
Mr A has recently died. The estate now worth ~£625k due to care home fees. Just about everything is cash baring a couple of small stock holdings.

Do the inheritors of Mr As estate pay tax on the amount over £325k, or does Mrs A allowance roll over to make the allowance £650k.

Thanks for any responses.

Wizards,

Wizardsmagic wrote:Do the inheritors of Mr As estate pay tax on the amount over £325k, or does Mrs A allowance roll over to make the allowance £650k.

Thanks for any responses.

Wizards,

The simple answer is yes, the unused allowance rolls over. Have a look here...https://www.gov.uk/inheritance-tax/overview

RedSnapper wrote:

Wizardsmagic wrote:Do the inheritors of Mr As estate pay tax on the amount over £325k, or does Mrs A allowance roll over to make the allowance £650k.

Thanks for any responses.

Wizards,

The simple answer is yes, the unused allowance rolls over. Have a look here...https://www.gov.uk/inheritance-tax/overview

The amount being available (albeit calculated in percentage terms) being subject to the impact of the few small gifts totaling £20k on Mr A's IHT nil-rate band, which means a small part cannot be utilised by the Wife's Estate (which is why you put the unused allowance rolls over).

Given Mrs A's Estate is worth some £625,000 the impact of this in itself would be small. Even less if part of those gifts were charitable and thus exempt.

Remember you will have to actually clam this transferred allowance on form IHT402. As PinkDalek says they will deduct those other gifts, and any other gifts in the 7 years before they died to add back any Potentially Exempt Transfers they made. In fact they will want to see the wife's will that made the gifts and the probate stuff to check it all out. And there are special rules around deaths in Scotland, if relevant.

Thank you all for the quick replies. It's England, so the responses are very relevant.

I will ensure the executor looks at IHT402, to follow the correct path on this.

The gifts were all to MRS A's friends, so that small amount may be slightly relevant, but as helpfully pointed out, should be a small impact.

Thanks again,

Wizards