Active discussions

Please or to access all these features

Talk
AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

Paying IHT

106 replies

waitingforpost · 06/08/2025 18:03

The pension changes means more people will get pulled into the IHT threshold & on here a lot of people talk about their 1m plus homes.

Should the 6 month limit to pay free of interest be increased? Surely most can't pay it until a house is sold?

OP posts:
Unilaterallyinsane · 06/08/2025 23:08

TakeMe2Insanity · 06/08/2025 23:01

Sod off. Take your own insurance policy out in anticipation of your parents death and see how that feels.

Show quote history

I have no idea why you are telling me to sod off. Would you care to explain?

Notsuchafattynow · 06/08/2025 23:06

ShanghaiDiva · 06/08/2025 22:59

Not correct. If you are single with no direct descendants it’s £325k

Show quote history

I know. I was talking about a couple, who both use the nil rate allowance. So there CAN be 1 million inheritance without IHT, as much as as some CAN get hit if over £325, if they are single.

Maybe call it a range. Between £325 (for the single folk with no property/ decendents) and 1 mill (for the couple with property/ decendents).

TakeMe2Insanity · 06/08/2025 23:01

Unilaterallyinsane · 06/08/2025 19:00

If you are rich enough to go over the IHT threshold, you need to take out an insurance policy which will cover interest before probate is back.

Sod off. Take your own insurance policy out in anticipation of your parents death and see how that feels.

ShanghaiDiva · 06/08/2025 22:59

Notsuchafattynow · 06/08/2025 19:11

I think you'll get little sympathy tbh. If an estate is large enough for IHT, then it's over 1 mil.

And (if I remember correctly), the first mil is not taxed, only the amount over. So yes, while I imagine it's a pain or difficult to pay it up front, it's on the basis you're about to get significant assets.

Not correct. If you are single with no direct descendants it’s £325k

MenopauseSucks · 06/08/2025 22:45

If you’re single with no children the IHT limit is £325k.
There is a £175k main residence relief if your estate is going to your direct descendants.
so this can mean a single parent can have IHT relief up to £500k.

The mythical £1 million IHT limit only applies to a a widow/civil partner leaving their residence to children or grand children
ie 2 x £325k IHT relief & 2 x £175k main residence relief = £1 million.

For the rest of us singles with no children, IHT starts at £325k…

Original poster
waitingforpost · 06/08/2025 19:29

It will likely go on care anyway so as you say no point worrying about it. I was just wondering what other people thought as the pension changes will pull more people in.

OP posts:
RedRiverShore5 · 06/08/2025 19:27

I wouldn't worry about it and just organise a loan to pay it, I imagine it's quite usual to do this.

Original poster
waitingforpost · 06/08/2025 19:24

Just regard the interest as an extra tax then if you have no problem paying the tax.

I don't like the idea of getting into debt to pay extra tax.

OP posts:
Unilaterallyinsane · 06/08/2025 19:24

waitingforpost · 06/08/2025 19:01

@Unilaterallyinsane who takes this out? parents?

The person leaving the money, whoever that is. Anyone with all that money would be advised to take out insurance by a FA.

Notsuchafattynow · 06/08/2025 19:23

It can also be paid via DPS where cash assets of the deceased can be released directly to HMRC prior to probate. Even if it's just enough for a part payment it can reduce the interest due overall.

I don't think it's really had much priority to change, but maybe as more families fall into it, it will be reviewed.

GasPanic · 06/08/2025 19:22

waitingforpost · 06/08/2025 19:17

I don't have an objection to paying the tax just think a 6 months timeframe and having to pay interest/take on debt is harsh.

Just regard the interest as an extra tax then if you have no problem paying the tax.

Original poster
waitingforpost · 06/08/2025 19:17

I don't have an objection to paying the tax just think a 6 months timeframe and having to pay interest/take on debt is harsh.

OP posts:
Notsuchafattynow · 06/08/2025 19:15

waitingforpost · 06/08/2025 19:13

So yes, while I imagine it's a pain or difficult to pay it up front, it's on the basis you're about to get significant assets.

But my point is where do people potentially find hundreds of thousands of pounds before they inherit anything?

There are specific loans / companies that do these.

And yes, a single person would only get 500k allowance.

Original poster
waitingforpost · 06/08/2025 19:13

So yes, while I imagine it's a pain or difficult to pay it up front, it's on the basis you're about to get significant assets.

But my point is where do people potentially find hundreds of thousands of pounds before they inherit anything?

OP posts:
Original poster
waitingforpost · 06/08/2025 19:12

I think you'll get little sympathy tbh. If an estate is large enough for IHT, then it's over 1 mil.

Not if you're a single parent...

OP posts:
Notsuchafattynow · 06/08/2025 19:12

RedRiverShore5 · 06/08/2025 19:09

I see that the house can't be sold until the tax is paid, why is this.

To ensure the tax is paid, I imagine.

Original poster
waitingforpost · 06/08/2025 19:11

I see that the house can't be sold until the tax is paid, why is this.

I've only just learnt this from this thread!

OP posts:
Notsuchafattynow · 06/08/2025 19:11

I think you'll get little sympathy tbh. If an estate is large enough for IHT, then it's over 1 mil.

And (if I remember correctly), the first mil is not taxed, only the amount over. So yes, while I imagine it's a pain or difficult to pay it up front, it's on the basis you're about to get significant assets.

ShesTheAlbatross · 06/08/2025 19:10

YANBU. I’m massively in favour of IHT - and as it stands, my parents’ estate would owe it if they were to die tomorrow and I still think it should be considerably increased. But plenty of estates aren’t cash rich, and there shouldn’t be a penalty for things like selling a house taking time. Especially since we have such a bloody awful house buying/selling process in this country.

RedRiverShore5 · 06/08/2025 19:09

I see that the house can't be sold until the tax is paid, why is this.

RedRiverShore5 · 06/08/2025 19:06

And no 6 months is not long. It should be a reasonable amount of time to allow the house to be sold

RedRiverShore5 · 06/08/2025 19:05

I think you can get a loan, like a bridging loan, against the house

Original poster
waitingforpost · 06/08/2025 19:02

You can't sell the house until the tax is paid and probate granted. If you can't pay you can pay in installments but that incurs interest. It's not user friendly!

what happens if you can't afford the instalments?

OP posts:
Original poster
waitingforpost · 06/08/2025 19:01

@Unilaterallyinsane who takes this out? parents?

OP posts:
Unilaterallyinsane · 06/08/2025 19:00

If you are rich enough to go over the IHT threshold, you need to take out an insurance policy which will cover interest before probate is back.

Swipe left for the next trending thread