Inheritance Tax

[morningstar32]

My husband died intestate in 1995. Would my executor be able to claim his unused inheritance tax threshold when I die. I was his executrix and I have confirmation (probate) of his estate.

[Buenchico]

The IHT threshold in 1995 was £154,000. (That assumes that your husband died after the start of the 1995-96 tax year. If it was during the previous tax year the figure was £150,000). Bequests to yourself don't count against that allowance but gifts to others do.

So, if your husband left everything to you then his £154,000 allowance is transferable to your estate. However if he left £80,000 to others then there's only £74,000 of his allowance left to transfer to your estate.

[morningstar32]

Thanks, Buen My husband died in his forties very suddenly and unexpectedly. He had not got round to making a will because he only had about £25,000 in total apart from our jointly-owned home and his pension which he had nominated to myself.
So is it 100% of the threshold in 1995-1996 that could be added to my threshold for inheritance on my estate.

[Buenchico]

As long as he didn't leave anything to anyone else your estate will get the full benefit of his IHT allowance. But if, say, he left £1000 to his brother, that £1000 will come off the transferable allowance.

[morningstar32]

Many thanks, Buen
He didn't leave any instructions about who was to get what, but would I have to prove that and how, as there is no will?

[Buenchico]

Since your husband died intestate (and with a relatively low-value estate) everything went to you automatically. See the second table here:
http://www.graysons.co.uk/wills-intestacy.html

[morningstar32]

Buen
Everything I had read about this referred to the will, so thanks for clearing this up for me.

[ubasses]

Do not worry about the amount of the threshold in 1995, it is the threshold on the day you die that matters. As he did not use any of his allowance, yours will double at the date of your death. It is the percentage of his allowance used, had he done so that counts.

ie: using the 1995 figure of £154,000, if he had left 50% (£77000) to another relative that would reduce by 50% (£162500 at todays date) the amount that would be transferred to you estate.

Hope that makes sense.

[factor-fiction]

Thanks for clarifying that ubasses- that's what I'd always thought but Buenchico's post made me wonder whether I was misinterpreting his reply or if I'd always misunderstood the rules

[morningstar32]

Many thanks for that Ubasses. That makes a big difference and is very good news.

Thanks also to factor-fiction and Buenchico for your interest.