So What Has now Changed?
The Chancellor announced in his Pre-Budget Report in October 2007 that, with effect from 9 October 2007, where the surviving spouse or civil partner dies, their estate may be able to claim an additional nil rate band. This will depend on the proportion of the nil rate band that was used on the death of the first spouse or civil partner. This means that, in a simple case, where all the estate passed from the first spouse or civil partner to the survivor, the estate of the survivor will effectively have two nil rate bands available.
| If we return to the example of Duncan and Eunice and simply change the date of her death to December 2007, the situation changes dramatically. Duncan did not use any of his nil rate band and so, on Eunice’s death, the total nil rate band available becomes £600,000 and the IHT bill will drop from £200,000 to just £80,000, being (£800,000 - £600,000) x 40%. |
For the surviving spouse or civil partner, it will be important to ascertain what happened on the death of the first spouse or civil partner, no matter how long ago that event occurred. HM Revenue and Customs will want evidence when the IHT Account is made on the death of the survivor. They have stated that as well as wanting to know the proportion of the nil rate band which was not used, they will want basic information such as the marriage or civil partnership certificate of the couple, the Will or Probate details of the first to die, as well as details of any variation of their Will.
In the future it will be important on the first death to retain all that information so that the evidence is available at the time of the second death. |
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