Inheritance Threshold

[Butterbun]

What is the amount at which you have to pay inheritance tax? Does anyone know what the threshold is? Asking on behalf of a friend who is a bit confused about it all.

[MichaelZZ]

It should all be here!
http://www.hmrc.gov.uk/rates/iht-thresholds.htm

[Gizmonster]

As the link provided by Michael says, the threshold is £325,000 - but as we don't know the circumstances of your friend, I'll add the following:

"Married couples and civil partners are allowed to pass their possessions and assets to each other tax-free and, since October 2007, the surviving partner is now allowed to use both tax-free allowances (providing one wasn’t used at the first death).
At the extreme, this effectively doubles the amount the surviving partner can leave behind tax-free, without the need for special tax planning."

[seadogg]

As the rates could change, we have stashed away an amount in trust anyway. Don't trust the government.

[VHG]

My father died 10 years ago, and my mother died last year. Because neither had used their tax allowances we got the maximum IT relief for both of them.

So it was £325,000 plus £325,000 = £650,000

As their house sold for £750,000 we only had to IT on the amount ABOVE £650,000

[Gizmonster]

That's the point I was making VHG.
My step mum died last year, passing her allowance on to my dad - his allowance is now £650,000.

[Butterbun]

Thanks to everyone who volunteered information which has been very useful. The link MichaelZZ provided gave the figures she needed. As a widow she was worried that the treasury would grab what she worked for and her family getting very little. She tried to put the house in her son's name but the solicitor refused to do it hence the worry about it. I don't know her figures, but she said it has put her mind at rest as now she knows she is within limit. I think she's a bit afraid of her solicitor after the way he spoke to her. So thanks again for your help.

[Gizmonster]

The solicitor should have explained why transferring the house into her son's name wouldn't have solved things..
You can't simply put the house in someone else's name and continue to live in it, unless you pay rent at the market rate. This will then present a new liability of the recipient of the rent having to pay income tax on the rent.

Check the following link out:
http://www.hmrc.gov.uk/inheritancetax/pass-money-property/pass-home-to-children.htm

[Peter Pedant]

She doesnt sound English - your fren' I mean.

She would trip over the now rather strict rules on 'interest in possession' and 'reservation of benefit'

which she can spend many happy hours goggling it and getting things like:

///Lifetime transfers: introduction to gifts with reservation of benefit
www.hmrc.gov.uk/manuals/ihtmanual/ihtm04071.htm‎
Tax agents & advisers ... Why the gift with reservation (GWR) rules are necessary ... children but continues to live in it for at least seven years until their death///

so that lawyer, he was doing her a favour -prsumably spurred on by the fact that if he had done it and not told her it was bound to fail - when her heirs got a whacking great inheritance tax bill, they would come to him for the balance.


one hasnt been able to gift the house one is living in to heirs tax free since around 1985. Your fren' needs tax and wills advice which is not really available free on a site such as this.


The main reason why your fren' is confused is that Mrs Mopp down the road said she would be able to do it when she in fact can't. Result:confusion