I have a deceased client with a large estate, his will included a NRBDT and residue to spouse. There are significant cash assets (but estate less than £2m so no taper) and it is intended that the cash assets will pass into the NRBDT with reside to spouse. The property would therefore also form ‘residue’ and pass to the wife, thus TRNRB for use on wife’s subsequent demise.
The deceased retained the full ownership of the family home throughout marriage (I stress we did not advise on lifetime planning) and now, at time of his death, his wife is in residential care. As the property is not needed, the executors intend to sell the property during the period of administration for ease. However, as I would see it, this would mean that the wife could never be eligible for RNRB in her own right, as she would never have owned property.
If, however, once probate is granted, the property is transferred to her for a period of time (no matter how brief) then as is it a property that she once lived in, though at that time she did not own it, do you think that it would make her estate eligible to claim the RNRB for her, along with the TRNRB for late husband. (Her estate will pass to linear decedents on her demise).
There is reference in the RNRB notes for the need for an eligible property to have been lived in by the deceased at some time, but I can’t find anything to say that it had to be ‘owned’ at the time of that occupation. Is this just inferred?
Does anyone think that it is worth taking the step of transferring the property to the wife before sale (and suffering the costs to the estate of the first registration that comes with it), with an attempt to argue with HMRC that the RNRB applies on her death along with the TRNRB? Or, does anyone feel that HMRC are unlikely to accept the claim as her occupation was before her ownership and I am clutching at straws?
Any comments much appreciated!