Inheritance Tax Threshold Transfer

Summary

Inheritance tax thresholds in England are not automatically adjusted based on relationships. The standard threshold is £325,000, and any unused threshold can be transferred to a spouse or civil partner, potentially doubling it to £650,000. This transfer is not automatic and requires submitting form IHT402 to HM Revenue and Customs (HMRC) with supporting documents like the death certificate and will. If the estate exceeds the combined threshold, it may be subject to a 40% inheritance tax.

Full Conversation

yes a will left all assets to my mother
Since all assets were left to your mother through a will, the inheritance should be within the will's provisions. Here are some key points to consider:
- Your mother can inherit the estate up to £*,* without paying inheritance tax.
- If her husband (your stepfather) has unused inheritance tax threshold, it can be transferred to her, effectively doubling her threshold to £*,*.
Did your mother’s husband have any unused inheritance tax threshold?
yes
Case Rating: *.
It appears your mother's husband (your stepfather) had an unused inheritance tax threshold. Here's what you need to know:
- Your mother can inherit up to £*,* tax-free due to the combined thresholds.
- Any amount above this may be subject to inheritance tax at *%.
Do you have any specific concerns or need further clarification on any aspect?
yes is that automatic transfer
The transfer of unused inheritance tax threshold between spouses or civil partners is not automatic. It requires an application to HM Revenue and Customs (HMRC). Here’s what you need to do:
- Submit form IHT402 to HMRC to claim the unused threshold.
- Provide supporting documents, such as the deceased's death certificate and will.
Do you need more information on how to fill out the IHT402 form?
yes please
To fill out the IHT402 form, follow these steps:
- Obtain the IHT402 form from the HMRC website.
- Provide details of the deceased, including name, date of birth, and death.
- Fill in the unused threshold amount.
- Attach supporting documents like the death certificate and will.
- Submit the form to HMRC.
Do you need help with any specific part of the form?