Claiming more than one IHT threshold if double widowed

Trusts Discussion
1

I always understood that a remarriage would stop the subsequent transfer of an IHT band.

Tonight I have been sent this:

If this is so, how and where do I claim it??

Many thanks!

J

2

Yes you can, but the maximum that can be carried forward using IHT402/436 is the current NRB £325,000/RNRB £175,000. I haven’t done it yet, but I presume you would use two or more forms.

Patrick Moroney

3

I have done this several times. You just submit a separate IHT402 for each deceased former spouse. I also sometimes add a short narrative to the ‘Additional information’ section on page 16 of IHT400 to explain the situation to HMRC. As Patrick said, you cannot claim more than 100% additional NRB on top of the testator’s own.

4

Thanks both for clarifying. I am a little confused about the maximum sum allowed, and assume this sets an overall limit to the claim where the previous two spouses may only have used part of their NRB?

In the case I am looking at, Mum died in March. She had previously been widowed (many years before) and her late husband had not used his NRBs. She remarried, and has now died leaving her estate to her Widower (we are doing DoV to leave her estate to daughter to avoid Dad’s estate going over £2m).

Dad sadly died 7 weeks later. He too had been previously widowed with his first wife not using her NRB.

So am I able to apply double NRB to both of their estates, relating to their prior spouse rather than the one married to at date of death (which I am not transferring as using Mum’s via the DoV).

Thanks for the help! The more I think about this, the more complex it seems. Especially when it refers to the wording of a subsequent Will!

6

I agree with @Karl but wonder if there’s also scope to vary the estate of the first of this couple to die (i.e. “Mum”) to achieve the effect he describes even if the wills don’t do it.

7

Re-reading @JDL’s posting, might it not be possible to get FOUR nil-rate bands out of this situation? The only limitation is that no-one is allowed to claim more than one person’s worth of transferrable nil-rate bands in aggregate. And here we have two people, both dying within the last two years, both of them with a previous spouse who died without using their nil rate band or residence nil rate band. So (assuming that the beneficiaries of the two estates are the same people and that the equity in the property exceeds £700,000) you could vary Mum’s estate (including severing the property and other joint assets if needed) to leave over £1 million to the daughter, claiming Mum’s, and Mum’s first husband’s NRB, RNRB, TNRB and TRNRB - a total of £1million. Then Dad’s will leaves the rest of the total estates to the daughter, claiming his and his first wife’s NRB, RNRB, TNRB and TRNRB - a further total of £1million. So a total of £2million in allowances altogether. You’d need to check the facts carefully to ensure it works for you, but it’s theoretically possible.

8

Hi All

I have a similar situation wherein the ‘now deceased’ was widowed but remarried.

The now deceased’s Will leaves a NRB and RNRB legacy into DTs. Remainder to be inherited by the surviving spouse.

Could I utilise the predeceased spouse’s unused NRB and RNRB by transferring them into in the now deceased’s estate and leaving the now deceased’s NRB and RNRB unclaimed to allow them to pass to the surviving spouse?

Many thanks.