Inheritance Tax Thresholds

[TheWordWomanIsTaken]

Can someone knowledgable tell me whether the enhanced iht level applies to a family home from the the estate of a person that died before 2017.

The deceased was married at the time of death and left their whole estate to their spouse. This meant that their allowance of £325k was not 'used'.

The estate included their share of the family home which will now be left to the adult children of the surviving spouse on their (the spouse's) death but will the inheritance tax threshold be £825k or £1m?

I think probably the higher one. My father died in 1996 leaving bequests to my sister and I which were, collectively, significantly less than the then allowance. The rest to our Mother.

When Mum died I'm pretty sure that the unused part of his IHT was used.

This is probably an area where proper advice, the sort you have to pay for, is advisable.

There are a lot of oddities and backwaters in IHT and my sis and I were very glad we had a professional co executor to help us navigate.

A call to HMRC (inheritance tax option) office would likely clear that up.

I called them a couple of times with my queries, and although they give very bot like responses, should be able to confirm if it can or cant be used.

Not sure if this link helps.

https://www.gov.uk/guidance/inheritance-tax-residence-nil-rate-band#how-to-work-out-and-apply-the-rnrb

You will get £1m. We had this exact situation with my MILs estate. Although there is an upper limit to the estate after which the additional £175k allowance is tapered.

The Residential Nil Rate Band is transferable between spouses, even where the original spouse died prior to the introduction of the RNRB.