Basic explanation required of a will containing a property in trust and inheritance tax?

[Billoddiesbeard]

I lost my mum April this year. She was widowed in 2003 when my dad died. Dad left everything to mum in his will.
Mum subsequently remarried a lovely man, who had a grown up son and daughter. My mum brought more money and assists to the marriage and her husband was always very clear he wanted this money to be left to me and my sibling.
They jointly bought a house, after each selling respective properties in 2005. This house is worth approx £400k.
In her will mum, written 2013, has left the house in trust to the 4 children (me and my sibling and her husbands 2 children). Her husband is tenant in law?? Until he dies.
The rest of her estate, up to inheritance tax threshold, has been left to me and my sibling. The residual estate and any joint accounts goes to her husband.
I am not clear what the inheritance tax implications are on the trust for me and my sister. Would it be the full 40% of the 400k or would it be 40% on £200k as we have half the value of the house left in trust to us. The husbands children are not beneficeries of the will apart from the trust.
I am not executor to the will so not sure if I could contact the probate solicitor with these questions.

It's 40 % on the amount above iht. Not the full total

Thanks bimbo I don't think I explained myself properly. We are expecting at least £2 -300k in money as part of the estate as well.
It is how iht will be calculated on the trust I am querying. So the whole estate including the trust will be above the iht threshold but I am not sure on whether my sister and I will be hit for the full price of the property (400k so £190k.)or just our share (so £200k and 90k of iht)..if that makes sense

Sorry above calculations should read 400k and 160k iht or 200k and £80k iht

I'd expect the husband to pay all the IHT as he gets the residual estate, but I am in no way shape or form a lawyer so I have posted my view in the hope you'll get an answer and I'll see it on 'threads I'm on'

I'd suggest contacting the probate solicitor for advice on this as it will depend on the exact value of the estate and precise terms of the will.

As your mum was a widow, she could potentially leave £650k IHT free (her own allowance plus the allowance from your dad's estate). It sounds to me from what you've said that there may be no tax payable, but check with the solicitor.

Thanks all for your replies

Depends on the house ownership. If it was tenants in common, the house is included in the estate. If joint tenants, the husband gets his share and it is not included for estate purposes.

It was tenants in common. So does that mean that my mum's half of the property ,so 200k, is included in mums estate or the full 400k?

If they were tenants in common your mother owned half the property so £200k would be included in her estate.

As she is leaving the house in trust for her children it sounds like her estate may qualify for the new residence nil-rate band provided she died after 6th April. That increases the tax free amount by £100,000 to £425,000.

There is no inheritance tax to pay on anything she has left to her husband. I suspect the intent of the will is that, if we say her share of the house is worth £200k, the next £225k (assuming the estate qualifies for the residence nil-rate band, £125k if it doesn't) goes to you and your sibling with the remainder going to her husband. That way there would be no inheritance tax to pay. It certainly sounds like she was trying to avoid any inheritance tax liability so I hope the will has been drafted appropriately in order to achieve that goal.