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Hi - thank you for reply. I have spoken to the team, who insist on characterising my question as advice, and therefore won't help. But my question does not constitute advice. I just want to know what the methodology for calculating IHT is. I can make my own mind up about which tax planning measures are best for me - but only once I know how IHT is calculated. Please help. Thanks.
Hello - I hope you can help.
My elderly mother has moved out of the house that she owned with her husband (now deceased), and into rented accommodation. House value is £900k, and other savings is £100k. Her deceased husbands reliefs remain unused.
1) If she had died (hypothetically) whilst still resident in her previous wholly-owned property, then I know that her entire £1m estate will be covered by 2 X NRB and RNRB. So no IHT due. Is this correct?
2) But in reality, she now rents, so is the RNRB still allowed to be employed on death? Is there a time limit whereby the RNRB can no longer be employed, if she lives in rented for, say, another 10 years after selling? I don't believe there is a time limit, but please confirm.
3) Assuming no time limit, what happens if she gifts a substantial part of the property proceeds - say £800k - to her children before death? If that gift occurred today, and death occurred in say 5 years time - would the £800 still be covered by the RNRB and therefore IHT free? Or would it no longer qualify, and instead by treated as any other lifetime gift, and subject to PET taper relief?
In essence, we want to know if we would lose out financially through additional IHT liability if my mother were to gift monies (that would otherwise be covered by the RNRB) early, before her death.
I hope you can help!