I have a concern re the Downsizing Provisions and the TRNRB.
Following HMRC’s forms and PLC guidance it seems that if a property is sold post July 2015 but before the death of either spouse, the allowances can only be applied to the share of the property of the second spouse to die? (So where spouses owned jointly in equal shares to only half the value of the property.) I just wanted to check my understanding is correct, as it doesn’t feel right, and would appreciate any guidance the forum has to offer.
I have clients who downsized in 2014 from a £350k house to a £250k property, so the RNRB will only be applicable re the £250k property. They are both still alive and in the process of moving into residential care and so may well sell the property once they are settled. Their combined estate is worth in the region of £1.25 million and we need to consider the best way of protecting the RNRB – one approach may be to simply leave their respective shares of the proceeds of sale directly to their children in both Wills (or maybe make use of an IIP as we have care costs to consider); but that is only if my understanding of the Downsizing Provisions and their interaction with the Transferable RNRB is correct and I’m not unnecessarily complicating matters.