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inheritance tax

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GCN | 16:43 Tue 09th Oct 2007 | Personal Finance
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does anyone know from todays mini budget inheritance tax has risen to 600.000,my mother in law died 4years ago leaving her house in trust for her sons to inherit when their step father dies ,will inheritance tax stand at 600.000 for them or will it be it be at the level of when she died?
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Your mother-in-law's estate will have had IHT applied to it based on the rules at the time she died, and on the way her estate was disposed of under the terms of her will.

When the step father dies his estate will be subject to IHT on the rules applying when he dies. However, from what you say he does not own the house outright. Presumably he only has a life interest in it under the trust so the capital value will not be part of his estate.

The rules applying to IHT and trusts are complex and depend on the type of trust among other things. You need to get specialist advice if you want definite information.
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themas-
thanks for that yes he can live in the house,-until he dies ,-although he does not own any part of it.
<Presumably he only has a life interest in it under the trust so the capital value will not be part of his estate. >

Sorry, life interests DO form part of an estate for IHT purposes.

The IHT threshold will be that in force when the stepfather dies
dzug

I am quite happy to be corrected, but could you refer me to the regulations etc which spell this out. At present I cannot see how the capital value can be part of the estate of the person with the life interest, because that person did not own the asset so has nothing of value to leave in his/her will. The life interest expires on the death.

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