Inheritance tax allowance
Discussion
I know it's not a business question directly, but it is the family business profits at risk.!
I understand that IHT for a single person is £312k and £624K for a couple.
But at what point does someone become single, is there a priod of time ( 7 years ? ) that the person must have been married within.
ie. Mum dies 2005 - Dad dies 2009 therefore IHT threshold = £624k
or. Mum dies 2001 - Dad dies 2009 therefore IHT threshold = £312k
Please clarify for the hard of thinking..!
Thanks
Graham
I understand that IHT for a single person is £312k and £624K for a couple.
But at what point does someone become single, is there a priod of time ( 7 years ? ) that the person must have been married within.
ie. Mum dies 2005 - Dad dies 2009 therefore IHT threshold = £624k
or. Mum dies 2001 - Dad dies 2009 therefore IHT threshold = £312k
Please clarify for the hard of thinking..!
Thanks
Graham
I guess we're talking property here.
What happened when the first person passed away? I guess the remaining person declared a life interest in the part of the estate that
was formed by the property?
Personally I'd get in touch with a Solicitor, they will be able to knowledgeably inform you and be able to help you out, it sounds like it would be worth it!
I can pass a firm's details onto you if you PM me (my wife is a solicitor, but works in another area of law), or I'm sure there are one or two on here..
Saying that, I think this article : http://www.telegraph.co.uk/finance/personalfinance... has what you need and are hoping to hear.
The 7 year rule, is on gifts...
ETA from link above :
"
Andrew Tailby-Faulkes, tax partner at accountants Ernst & Young, said: "It is quite a clever way of responding to Conservative proposals to raise the nil-rate band to £1m, but what is really interesting is that you can look back at spouses who have died, and bring their allowance forward into your own estate."
The change is backdated to benefit 3m living widows, widowers and bereaved civil partners who have already lost their other half, according to the Treasury.
Mike Warburton, senior tax partner at accountants Grant Thornton, said: "Generously, the proposals allow the widow or widower to add the unused proportion based on the nil-rate band at the time of the second death – not the lower threshold when the first partner died."
For example, if the first spouse used half their nil-rate band to leave money to their children, then when the second partner died, they would benefit from a tax-free allowance worth half as much again. If the second spouse died this year, they could therefore leave £450,000 without paying IHT, rather than £300,000.
"
What happened when the first person passed away? I guess the remaining person declared a life interest in the part of the estate that
was formed by the property?
Personally I'd get in touch with a Solicitor, they will be able to knowledgeably inform you and be able to help you out, it sounds like it would be worth it!
I can pass a firm's details onto you if you PM me (my wife is a solicitor, but works in another area of law), or I'm sure there are one or two on here..
Saying that, I think this article : http://www.telegraph.co.uk/finance/personalfinance... has what you need and are hoping to hear.
The 7 year rule, is on gifts...
ETA from link above :
"
Andrew Tailby-Faulkes, tax partner at accountants Ernst & Young, said: "It is quite a clever way of responding to Conservative proposals to raise the nil-rate band to £1m, but what is really interesting is that you can look back at spouses who have died, and bring their allowance forward into your own estate."
The change is backdated to benefit 3m living widows, widowers and bereaved civil partners who have already lost their other half, according to the Treasury.
Mike Warburton, senior tax partner at accountants Grant Thornton, said: "Generously, the proposals allow the widow or widower to add the unused proportion based on the nil-rate band at the time of the second death – not the lower threshold when the first partner died."
For example, if the first spouse used half their nil-rate band to leave money to their children, then when the second partner died, they would benefit from a tax-free allowance worth half as much again. If the second spouse died this year, they could therefore leave £450,000 without paying IHT, rather than £300,000.
"
Edited by ginettag27 on Wednesday 4th February 16:28
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