Can someone enlighten me on inheritance tax please.

[Tolkienista]

My mother is 94 in full mental and physical health, literally as fit as a fiddle. Yesterday we went for a 2 mile walk and did some shopping too. She lives on her own at home without any assistance, (goes out shopping daily) after my dad passed away in 2011.

I've never really thought of inheritance tax didn't even know the threshold until I was recently listening to a phone in on radio where it was being discussed......the threshold of £325K would be passed if she died with her house and savings worth in total about £370K at current house prices.

I've read something about when the house is passed on after the death of a spouse the rate doubles.......so would this be the case after my father's death in 2011? Obviously my mother is now the sole owner of the house with four children who will inherit from her will anything she owns.

I deal with all her financial issues as my siblings don't live close by and it's a bit of a worry to be honest, so any advice will be gratefully received.
Many thanks.

My basic understanding is that if everything passed to your mother on your father's death (and they were married at the point of death) then no inheritance tax was payable at that point, and the allowance is passed to your mother and increases the amount she can pass on without paying inheritance tax. If some stuff passed to e.g. children or grandchildren then the additional allowance is reduced proportionally.

And then on top of that there is an additional inheritance tax allowance for family homes, I think up to £500k per person but I don't fully understand how that works.

I think assuming your parents were married at the time of your father's death and that he didn't also pass on hundreds of thousands of pounds to other people it's unlikely IHT will be payable, but as always given this is via the internet one doesn't know the full story and can't therefore make any claims with certainty.

£325 k excludes her house. She can add to this any unused allowance from her spouse (so £325k less any of his estate that went to anyone other than her)

there’s an additional £175k (plus her husbands £175k) so max £350k allowance for the house - as long as the house is given to children or grandchildren

https://www.gov.uk/inheritance-tax

Yes, you get double the threshold if they were married and it didn’t get claimed when your father died. We were in similar situation when my FIL died a couple of years ago. House value and savings took him over the £325 threshold, but we claimed double as MIL died previously. DH and I were Executors of the Will and doing the forms wasn’t too bad. The Probate Office were very helpful telling us which forms to fill out and what boxes need filling in.

You need to sit down with her and make a list of assets that comprise her estate. Has she made a will?
If not, you need to get on and speak to an estate planner.
If there are grand children she can create a trust for them.
Get it sorted out now. It will be much harder if you leave it and have to pay IHT up front.
I have got my will, pension info, bank account details and life insurance policy all in a box file and labelled ready for DC. Plus details of funeral director and instructions. Just to make everything easier.

Both my parents died recently and I did the probate etc. As their estate was worth just under a million, there was no inheritance tax to pay.

If she inherited from your df , assuming they were married, his allowance also comes into play.

Thanks to everyone who has taken the time to reply to my post. Your comments are all very relevant to my question and informed too from your own experiences.

Much appreciated.

Yes she's made a will and yes I've got a list of her assets and investments.

Yes that all sounds OK.

FIL was a widower so his long dead wife's exemption applied.

One think we did was do a will variation to pass some money direct to grandchildren tax free.

That is good. We had a challenge dealing with mum's affairs because it had all got into a muddle then she developed dementia.
That is why I have got it all sorted now.
My friend's mum had paid for her funeral in advance and written the order of service, bless her.

If there are any grand children you can put assets into trust for them.

Has to our mother made a will since your father died?

Sorry, had scanned thread and can see will is in order

“If there are any grand children you can put assets into trust for them.”

It is possible but doesn’t sound like the estate will be paying IHT anyway.

Yes...... her will definitely in order. One less thing to worry about!

No, but if it all goes to the children, IHT may be payable when the children die. Hence the idea of some going direct to GC

If everything passes between spouses and then to children, there will be an inheritance tax free estate of up to £1 million.

With trusts there are ongoing charges to running them plus submissions have to be made to HMRC.