Settled property: surviving spouse exemption
The parties may claim surviving spouse exemption in the estate of a widow (or widower) on the grounds that her (or his) spouse died in the Estate Duty period (that is, before 13 November 1974).
The background to this is that under the Estate Duty regime, unlike IHT, surviving spouse exemption did not apply on the death of the first spouse to die. However, in cases where property was liable to Estate Duty on the death of the first spouse, and the surviving spouse was given a limited interest in the property, e.g. for life or until remarriage, the property was exempt from Estate Duty on the death of the surviving spouse.
The Estate Duty exemption was kept for IHT purposes under IHTA84/SCH6/para2 in cases where the first spouse died before 13 November 1974. There are further details of this exemption at IHTM04450.
Such cases will still be seen today, and for some years to come, but they are diminishing with time.