Forced Use or Lose IHT Nil Rate Bands if No Will and Die Intestate

Published / Last Updated on 24/10/2024

We have already explained in other videos how estates are distributed when people die without a Will in England and Wales, Scotland, and Northern Ireland.

Read/Watch:

Death No Will England Wales

Death No Will Scotland

Death No Will Northern Ireland

If You Die Intestate and Married/Civil Partners with No Children

  • England and Wales = 100% of your estate goes to your spouse/civil partner.  No inheritance tax allowances have been used up.
  • Scotland = 100% of your estate goes to your spouse/civil partner.  No inheritance tax allowances have been used up.
  • Northern Ireland = 1st £450,000 of the estate + Personal possessions/chattels + 50% of the residual estate goes to your spouse/civil partner.
    • If parents are alive, they receive 50% of the residual estate in equal shares.  This may mean inheritance tax is payable on day 1 if this 50% is over £325,000.
    • If parents have passed but siblings (brothers/sisters) are alive, they receive the 50% of the residual estate.  This may mean inheritance tax is payable on day 1 if this 50% is over £325,000.

If You Die Intestate and Married/Civil Partners With Children

  • England and Wales = 1st £322,000 of estate + 50% of the residual estate goes to your spouse/civil partner.  No inheritance tax allowances have been used up.
    • Children inherit 50% in equal shares (if more than 1 and then their bloodline). 
      • If this 50% is below your own inheritance tax allowances, any unused allowances can be kept for your spouse/civil partner to be used on 2nd death.
      • If this 50% is above your own inheritance tax allowances, inheritance tax is payable on day 1 and there are no remaining inheritance tax allowances left over for your spouse.
  • Scotland = 1st £478,000 of Main Home Property Value (if property value below this is £250,000 then it is £250,000 only) + Contents/Possessions up to £29,000 + Cash up to £50,000 + 1/3rd of the residual estate.  No inheritance tax allowances have been used up.
    • Children inherit excess property value over £478,000 + 2/3rds of the residual estate meaning some allowances have been used up.
      • If children’s share is below your own inheritance tax allowances, any unused allowances can be kept for your spouse/civil partner to be used on 2nd death.
      • If children’s share is above your own inheritance tax allowances, inheritance tax is payable on day 1 and there are no remaining inheritance tax allowances left over for your spouse.
  • Northern Ireland = 1st £250,000 of estate + Personal possessions/chattels + 50% of the residual estate goes to your spouse/civil partner (if 1 child) or 1/3rd of residual estate (if 2 or more children).  No inheritance tax allowances have been used up.
    • If 1 child, they inherit 50% of the residual estate.  If 2 or more children, they inherit 2/3rds of the residual estate.
      • If this share(s) is below your own inheritance tax allowances, any unused allowances can be kept for your spouse/civil partner to be used on 2nd death.
      • If this share(s) is above your own inheritance tax allowances, inheritance tax is payable on day 1 and there are no remaining inheritance tax allowances left over for your spouse.

There is significant impact if you die intestate i.e., no valid Will and you are married, un-married co-habiting and/or you have children but there is also a wider impact on potentially losing inheritance tax allowances too.

Losing Nil Rate Bands

Inheritance Tax Nil Rate Band Allowance:  £325,000. 

  • The 1st £325,000 of your estate is inheritance tax free. 
  • Any unused allowance on death can be passed to your surviving spouse or civil partner.
    • If you are not married or in a civil partnership, any unused allowance on 1st death is lost.

Inheritance Tax Residential Property Nil Rate Band Allowance:  £175,000.

  • If you are a property owner, you have an additional £175,000 property nil rate band.
  • This allowance is used if you leave property to your ‘blood line’ children and adopted children (and their bloodline/branch of your family e.g.  your grandchildren/great grandchildren).
  • Any unused allowance on death can be passed to your surviving spouse or civil partner (usually in full if you left your property to your legally married spouse/civil partner and they then leave the property to the children/bloodline).
    • If you are not married or in a civil partnership, any unused allowance on 1st death is lost.
    • If you are single/divorced and have no children/adopted children (and bloodline), this allowance is also lost.

Dying without a Will is complex enough whether you live in England and Wales, Scotland, or Northern Ireland but it gets even worse if inheritance taxes become due on 1st death due to the various Intestacy distribution laws and can even mean losing inheritance tax allowances too.

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