T G Baynes have recently completed the administration of an estate where knowledge of an obscure area of Inheritance Tax law resulted in a significant saving of inheritance tax for the beneficiaries. The case concerned a widow whose husband had died on active service in the Second World War and who had never remarried.
The law relating to Inheritance Tax changed in 2007 so that for the first time, when the survivor of a married couple died they could transfer the inheritance tax nil-rate band which had applied when the first spouse died if they had not used it.
This was however of little benefit in most cases where the first spouse died before 1972 because tax was charged under Estate Duty, the predecessor to Inheritance Tax, on property passing from husband to wife or vice versa.
There was however an exemption to Estate Duty which applied where death had occurred on active service, and by combining the Estate Duty exemption with the procedure for transferring the unused inheritance tax nil-rate band, T G Baynes successfully claimed a reduction in the inheritance tax payable on the widow’s estate of over £117,000.00.
Anyone who wishes to make an appointment to see a member of the TG Baynes Wills & Probate Team, can contact the firm on 020 8301 7777.