This is not an area with which I am as familiar as I would wish, and would appreciate comments and assistance from those in the Forum who specialise in the NRB transfer area.
In a case where a widow died in 2017, is her estate entitled to a full IHT Nil rate Band Transfer from her husband’s estate whose nil rate band under Estate Duty was used up in
1972? He died in November, 1972.
I believe that there were posts on this topic in relation to non-domiciled first spouses dying during IHT transferring NRBs to domiciled survivors, but would appreciate a refresher
given the slight difference in dates and tax régime.
The NRB for Estate Duty was £12,500 in 1972, and there was no spouse exemption available at that time.
I think that the question might be reduced to the following:
Does s.8A amended by
Finance Act 2008, s 10,
Sch 4, paras 1, 2. simply consider the transferable nil rate band for IHT purposes to be the full IHT amount in the case where the first spouse died during the estate duty régime?
Assuming that it does, does VT in the formula need to be reduced by £12,500 or not?
certainly seems to be the case, as deceased non-domiciled spouses can transfer their, by definition, unused NRB by a hospital pass to the survivor whose estate can then use
I am seeking an honourable way out for HMRC in a usufruct “locked horn” situation before taking them to the Court of Session.
Thank you for any comments and assistance.