My father-in-law died two months ago. We tried looking after my mother-in-law in the home she had lived in for 60 years but as her dementia worsened it wasn’t safe to leave her on her own and we had to put her in a care home. It has been a traumatic time as she always wanted to be independent.
The care home costs over £50,000 a year. My in-laws didn’t have any savings and we need to sell their house to pay for it. The house will probably sell for £360,000 and we need to invest it for her — we have power of attorney. On her death, will inheritance tax have to be paid on any excess money from the house sale that is over £325,000? We are only selling the house for care home fees. It seems unfair that we could be liable for inheritance tax whereas if the house was left to her children after her death there wouldn’t be any inheritance tax liability.
LAK
The combination of increasing house prices and static inheritance tax thresholds has resulted in a lot more families being concerned about falling into the inheritance tax trap.
Your concerns are understandable but I’m pleased to say this shouldn’t be the case with your scenario due to the downsizing provisions in the residence nil rate band (RNRB) legislation.
After your mother-in-law’s passing, her executors will need to report to HMRC, including details of the property sale and it having been your mother-in-law’s residence, along with evidence that the remaining proceeds will pass to her descendants or step-descendants. This ensures the RNRB is captured, and based on these figures, assuming no or limited lifetime gifting by your mother-in-law, no inheritance tax will be payable.
Regarding your father-in-law’s death, if his wife inherited everything from him and he did not make substantial gifts within the seven years before his death, his transferable nil rate band (NRB) allowance is likely to be available. Combined with your mother-in-law’s personal NRB (assuming she has not used it through lifetime gifting), these allowances should cover the value of the house without any need to seek to capture the RNRB.
Rose Macfarlane is a partner in private client advisory at the law firm Irwin Mitchell irwinmitchell.com
Readers’ clinic
Is there any way to clean windows a) without smears and, most importantly, b) without shine — the latter to help prevent birds crashing into them? Thank you.
MC
Scrunch up a piece of newspaper into a ball, souse it with cheap white vinegar and rub it over the glass. You may need two or three balls to complete the job.
Rosemary Morton Jack, Oxfordshire
You can get smearless windows by using distilled water to clean them. If you or a friend has a condenser tumble dryer this is a good free source.
Katharine Morrison
Other sources of distilled water include a dehumidifier and defrosted water from a freezer.
JW
I use neat white vinegar on a damp cloth to clean the window, then a squeegee and finally a soft cloth. No streaks.
Vanessa Stern, Chichester
Apply soapy water — a squirt of washing-up liquid in a bucket — to the window with a sponge, then squeegee off. Finish by wiping the glass with a soft wash leather and warm clean water to dry. Works a treat.
Philip Hollowday
Future question
How can I stop the corners of my rugs from curling up on a wood floor?
Betty, Brighton
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