I wonder if subscribers have decided yet what to do about existing NRBDT’s set up with equitable charges over the main residence? My understanding is that the value of the charge will reduce the value of the property for the purposes of calculating whether the full residence nil rate band is available, so unless the property is worth £750K or more, some of the RNRN or TRNRB will be lost.
If the equitable charge route was used to avoid SDLT, as opposed to any “Phizackerley” type problem, can the trustees now release the charge and replace it with a simple debt?
Diana Smart
Gordons LLP
It has been pointed out to me that the property value figure mentioned in my post below should have been £700K (i.e. two times the total RNRB of £350K). And I have just noticed the typo “RNRN”, which should have read “RNRB”. Sorry for any confusion.
Diana Smart
Gordons LLP
If there was a NRB trust on the first death, there is presumably no TNRB available on the second death in respect of that spouse. The RNRB will not have been used on the first death, so is transferable. If the surviving spouse has a half share of the house, then if her share is worth at least £350,000 she will be able to use her RNRB and the TRNRB. If she has downsized those provisions may help.
Otherwise, a release of the charge may be an answer, if the trustees have the power to accept an unsecured iou, and provided Phizackerley is not a problem, or the charge could perhaps be secured against other assets owned by the surviving spouse.
Simon Northcott