We are acting on an estate where we need to establish if it would be possible to claim both RNRB.
Background is that husband died in May 2012. He left small legacies totalling £7k to grandchildren - 2 specific item gifts totalling £2,750 to children.
The property was owned as TIC with wife (50/50) - she was left a life interest in the property at the end of which the property passes equally between 3 children.
Residue equally between wife and three children.
There is some unused NRB available to transfer to wife’s estate and his full RNRB.
Wife has now died and leaves a number of legacy gifts and then the residue between nieces and nephews. Therefore, we assumed that we would not be able to claim her RNRB as her share of the property does not pass to direct descendants.
The property at the date of second death is worth £700k.
Half of the property value £350k is passing to direct descendants - although only under H’s will. As such, is it at all possible to claim both RNRBs as half the property value is passing?
Wife’s estate would include the whole value of the property - £700k as she owns 1/2 share and has had benefit of other 1/2 share under the life interest. £350k (half) is passing to direct descendants which is the value of 2 X RNRB and the other half does not qualify as not passing to direct descendants.
We just want to make sure we claim the maximum allowances available to the estate.
Any comments or thoughts would be greatly appreciated.
s.8 HA IHTA 1984 applies, so that the PRs and trustees can claim both the deceased’s RNRB and the carried forward RNRB from the husband up to the lower of £350,00 and the value of the share of the property held in trust.
This will reduce the IHT charge for the combined estate and trust fund and does not solely relieve the trust fund of liability.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
Just following on from this earlier thread, I now have a similar situation whereby husband died first leaving his share of the property to his wife for life and thereafter to their two children, a number of monetary bequests totalling £85k and residue also to wife for life then to the children. Wife has now died leaving monetary bequests of £90k with the residue divided equally between the two children and a friend. The property has been valued as to the whole at £650k. The total value of the estates including the trust fund of the husband’s residuary estate is verging on £1 million.
I had thought the full transferable RNRB would be available with the wife’s RNRB being restricted by one third but am now having doubts… comments would be appreciated! Many thanks.
The share of the house in the life interest trust will be eligible for RNRB/ TRNRB as it has been closely inherited on her death by the children. Her own share seems to be comprised in residue, so also eligible as closely inherited by the children. The maximum relief is £350k, as taper does not seem applicable, and as the the combined value of the two qualifying interests together seem to exceed that amount maximum relief should be due. The value of the house interest in the IPDI is alone almost sufficient to attract the full relief and the residue seems easily sufficient to attract the remainder.