IHT on the 2nd death

Trusts Discussion
1

Hi all. I have a question and I am doubting myself with the answer. I would be grateful for some guidance.

H has died with W is still alive. They both own two properties jointly and also two joint bank accounts jointly and one bank account in his sole name. The value of the joint assets is approximately £1,100,000 and the value of the sole account in his name is £75,000.

H Will leaves his estate (75K) to his children.

As his sole assets are under the threshold, I am assuming there is no IHT to pay at the moment but on the death of the W, there will be the TNRB and RNRB to claim should any IHT be due within the 2 years of the death?

Also, with the 2nd property, would IHT be due on this as this is not his main residence?

Thank you for your time.

2

I’m not sure what you mean by ‘within the 2 years of the death’.

Putting that to one side.
The balance of the TNRB should be available on 2nd death.
The RNRB is not specifically applied against a particular property. The amount of the additional ‘residence’ nil rate band has to be calculated by reference to the factors referred to in IHTA. If the 2nd property has been a residence then the executors can elect for that property to be the residence for the purpose of calculating how much RNRB is available. In practice this is only going to be important if the ‘main’ residence is worth less than £350,000 when W dies.

Paul Davies
Clarke Willmott

3

Thank you for taking the time to respond Paul

I am correct in that at this moment in time, there in basically no IHT to be paid ( as his sole account is £75K)?

I believe the 2nd property which is in joint names is a rented property.

Thank you
Claire

4

No IHT arises on passing of H’s interest in the jointly held assets as they pass automatically to W under the survivorship rule.

The NRB available for transfer on W’s death is 325k less 75k ie 250k. In % terms 76.9%.

Malcolm Finney