Inheritance Tax question

[FoxSticks]

Hi all,

Another one, I'm sorry, I've tried googling but cannot find an answer I understand. My dad died at the beginning of 2017 before the threshold changes came into effect which mean that unused threshold can be passed to a spouse. He was married to my stepmother and his share of the property was placed in trust and my step mother has a lifetime interest so she can stay in the house until she dies or remarries. When this happens will the IHT rules be the ones at the time of when my dad died or the current ones at the date of my step mothers death?

Thanks

The rules at the date of her death will apply. Indeed, if IHT thresholds are changed, the unused allowance that can be transferred will be based on the thresholds at the time of your stepmother's death.

Her death

That's really helpful, thanks prh47bridge and PickledPurplePickle. Hopefully won't be for a long time yet but am beginning to think about my own retirement plans etc

The thresholds and allowances as at Mumdeath, will apply. You may also be able to claim unused Residence Nil Rate Band for Dad. As he died before the 2017 regulations came in this is limited to 100,000.

Is you user name tongue in cheek.

Pre 2017 Transferrable RNRB is not limited to 100k.

There is a calculator on HMRC.gov.Uk which will help you work out what RNRB you can claim 😀

Sorry I was unclear the spouse that died prior to 2017 can transfer unused RNRB and used as well as the spouses RNRB who dies after
There is a useful calculators on www.HMRC.guv.Uk which will help you work out what is claimable

This is wrong.

It is true that the unused RNRB for a death before 6th April 2017 is assumed to be £100k, the unused percentage is assumed to be 100%. You therefore get 100% of the current RNRB when the second spouse dies. There is a worked example at Transferring unused residence nil rate band for Inheritance Tax - GOV.UK (www.gov.uk) where the husband died in 2015. His wife died in 2019, at which time the RNRB was £150k. She therefore gets £300k RNRB - her own £150k plus a transfer of £150k from her husband.