Hi,
I am dealing with an estate where the testator held the property as tenants in common with his wife. The property is valued at £600,000, and there are also cash and investments of approximately £205,000. The deceased’s last Will was made in 2007.
I am trying to complete the IHT400, but I am unclear whether the deceased’s share of the property passes to his spouse subject to a life interest/right-to-occupy trust ( which is fully exempt), or whether it passes directly to the beneficiaries as part of NRB.
For IHT purposes, should the deceased’s share of the property be valued at 50% of the property value (i.e. £300,000), or is the amount restricted to the Nil Rate Band? I presume £300k is treated as a specific gift to children since its lesss than the NRB and not part of an interest in possession trust.
I would be grateful for any guidance from forum members on how the property should be treated and, in particular, what amount should be included in the IHT400 for IHT calculation purposes.
Clause 3
I give and bequeath my half share in the property known as 1X to my two daughters………. in equal shares absolutely, provided my wife Y may reside in the property until such time as she wishes.
Clause 4
Subject to the payment of my just debts, funeral other testamentary expenses and all other liabilities I give device and bequeath the NIL Rate band sum (as defined below) to my aforementioned daughters at the date of my death in equal shares provided that always that if an unlikely event that any of them should die in my lifetime leaving child/children living at my death then such last mention child or children shall take by substitution that share of Nil Rate Band sum which her/his parent would have taken.
Clause 5
Nil Rate Band Sum- shell mean whichever is lesser of (a) the upper limit of nil rate band in the table of rates of tax applicable at my death in Sch 1 of IHT act 1984 and (b) the maximum amount which will not give rise to a charge to inheritance tax by reason of my death taking into consideration the gift given in clause 3 of this my Will.