IHT

[TwigtheWonderkid]

Probably been answered on another thread but just need clarification.

A wife dies in 1999, leaves everything to her husband so pays no IHT. If the husband dies now, is his IHT tax free allowance capped at £325K, or can the kids use her £325K from 14 yrs ago to make £650K.

[ellroy]

The unused allowance is the one applicable to 1999 , not the current £325k. You'll need to find out that then add to the second allowance which is at today's rate.

[sumo69]

pre 5/4/1999 was £223000

pre 5/4/2000 was £231000

Not sure that it isnt the current allowance though - brain not working well at this time!

David

Edited by sumo69 on Monday 11th March 09:06

[Tiggsy]

Ignore above.


The wife left 100% of her allowance to her spouse when she died....so spouse can inflate his allowance by 100% today - in other words £325k X 2 = £650k


The only time you need worry about what the rate was when the first died is if they had made some gifts other than to the spouse....for example, if they gave away £100k when the allowance was £200k then they used 50%....so today the spouse could only increase their £325 by an extra 50%.

[ellroy]

ellroy said:

The unused allowance is the one applicable to 1999 , not the current £325k. You'll need to find out that then add to the second allowance which is at today's rate.

Sorry I forgot its the % to that rate which apples, so if no gifts were made, 100% passes to the spouse, hence current rate is doubled.

If 50% were gifted of the original year then, 50% of the current is still unused and so on.

Apologies, long weekend.

[TwigtheWonderkid]

Thanks to all.