Inheritance Tax (3) Flashcards
What is the residence nil rate band?
An additional nil rate band used to compute IHT on death estate
When is RNRB relevant?
Deceased person died on or after 6 April 2017
Deceased person owned a home which is part of their death estate
Residence passes to one or more direct descendants of deceased person
Available RNRB is lower
Maximum RNRB
Value of main residence passing to direct descendents - (deducting any repayment mortgage or interest-only mortgage secured on the property)
What is the maximum RNRB?
£175000 + transferred RNRB from a spouse or civil parnter
What is the value of the main residence passing to direct descendents is less than maximum RNRB?
Unused RNRB may be transferred to the estate of a surviving spouse or civil partner
What is the available NRB for death estate
Maximum NRB
Lifetime transfers in seven yuears before death
What represents maximum NRB?
£325000 + transferred NRB from a spouse or civil partner
If one spuse or civil partner has already died?
But did not use all of their NRB on death
What happens to the percentage of NRB which was unused?
Can be transferred across to other spouse or civil partner and used in computing their death tax
When can unused RNRB can also be transferred to a spouse/civil partner?
If second spouse dies on or after 6 April 2017 and can then be used in computing the tax on their death estate only
What if first spouse died before 6 April 2017?
Deemed to have a RNRB of £175000, all of which is available for transfer
If the nil rate band increases between the death of B and the death of A?
Amount of B’s unused nil rate band must be scaled up so that it represents the same proportion of nil rate band at A’s death as did at B’s death
How are claims to transfer the unused nil rate bands usually made?
By personal representatives of second spouse or civil parnter to die
Time limit for claims to transfer unused nil rate bands?
Two years from the end of the month of their death
