RNRB and Right of Occupation

I think I know the answer but am looking for clarification as to whether some of the RNRB can be claimed in an estate where the deceased’s residence is subject to a right of residence for 12 months to the husband of the deceased (who is a new husband and not father of the children). Subject to this the whole estate is being divided between the deceased’s children, grandchildren (all adult), and husband. Does the right of occupation mean the RNRB is unavailable. We are already over 6 months post-death. Would a DoV removing the Right of Occupation work?

Victoria Armour
VP Legal Solicitors

Hazel Jones

In answer to Victoria‘a question, I understanding is that as the deceased spouse had a right of occupation which gave him an interest in possession in the property, on the cessation of that interest in possession he is deemed to have made A potentially exempt transfer to the children and grandchildren who were of course step children and grandchildren of his. There would therefore be no immediate charge to IHT but should he die Within seven years, the residence nil rate band and the transferable residence nil rate band would be available.
As regards Hazel’s question, The same principle whereby the cohabited at the end of his occupation will be deemed to have made a potentially exempt transfer
To the children of the deceased But if he dies within seven years, there would be no residence nil rate band available as he is not the father or stepfather. The RNRB Will not be available on the deceased’s death as the property is not passing absolutely to her children and grandchildren. I take no responsibility should either of these answers be incorrect But perhaps others might correct me if I am wrong.

Patrick Moroney

Yes it would, but the proportion going to the husband would not be available, unless you leave the residence on a specific legacy to the others, to be brought into account on the division of the residue, if the figures allow it.

Simon Northcott

My understanding is that a right of residence (just like a life interest) means that there has been no direct inheritance for the purposes of RNRB. In my mind this is in line with the requirement that the beneficiary has to become absolutely entitled/under an IPDI/BMT/18-25 or Disabled Person trust.

R Simpson
Thomas Simpson Solicitors