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What I am questioning is
A settlement in 1966 was set up for my wife's 3 children from her 1st marriage.5/8th was given to them when they were 21 or married.3/8th was kept in the settlement and my wife was given the income for life.On her death the 3/8th amounting to £304,000 was given to her 3 children from her 1st marriage.
My question is ''why is the capital 304,000 put into her estate for inheritance tax and why does it take precedance for the nil rate band of £325,000 before the rest of her estate,so that there is only £21000 nilrate tax band left to give to the son of her 2nd marriage to me