How to make the most of unused inheritance tax allowance
By Kirsten Hastings, 15 Aug 17
The UK tax office has recently updated its rules for transferring any unused portion of basic and additional IHT thresholds when the first person in a marriage or civil partnership dies.
The estate’s personal representative will need to give details of the amount due and supporting information on the IHT return.
They will make a claim to transfer any unused additional threshold from the estate of a late husband, wife or civil partner.
They will also need to make a claim for any additional threshold as a result of downsizing selling or giving away of the home before the person died.
As the additional threshold and basic IHT threshold are not linked, the percentages transferred can be different.
This means that even if all of the basic IHT threshold was used when the first of the couple died, you can still transfer the unused additional threshold.
The percentage of transferred additional threshold will be limited to 100%.
This means that if an individual has had more than one spouse or civil partner and they make a claim to transfer the unused additional threshold from each one, the total transferred additional threshold can’t be more than 100% of the maximum available amount.
Tags: IHT
