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Transfer of Earliest Nil Rate Band
A £30,000 inheritance tax bill has been avoided by probate specialists by transferring the nil rate band of what is thought to be the earliest 'first death' for inheritance tax purposes. The widow, who died last year some 65 years after her husband, left an estate that without the transferred nil rate band would have incurred a £30,000 inheritance tax bill. In normal circumstances the widow would not have been able to claim as up until 1949 the allowance was just £100; her deceased's estate totalled £700. The lady's husband however was an RAF officer who died in action in the second world war which meant the threshold rose to £5000, meaning that 86% of the nil rate band remained unused. Probate specialists from a York law firm used the legislation introduced in 2007 to avoid the bill as it allows a transfer to be claimed by the executors of the surviving spouse however long ago their spouse died. HMRC also reports that less estates than ever are now liable to pay inheritance tax. They have put this down to the introduction of the transferable nil rate band and falling house prices. Figures show that just 3% of estates are subject to inheritance tax which is a decline from the 6% observed at the peak of house prices.