I am wondering if anyone can help with downsizing and claiming the RNRB as it is the first time I have come across this.
Deceased died October 2025 and prior to his death he sold his residential property for £785,000 as he had been living in a nursing home.
The only assets in his estate at the date of death, are a Halifax bank account with £660,000 (which is from the proceeds of sale) and some shares with a value of £3,000. He also gifted £44,000 to his children the year of his death which I need to take into consideration.
I therefore need to use his NRB, the TNRB and RNRB.
My question is, are the funds in the Halifax account classed as other assets being inherited by direct decendants for the purposes of meeting the conditions to claim the downsizing element?
Any help would be greatly appreciated! Thanks in advance.
The statutory downsizing provisions allow for an RNRB to be preserved, in whole or in part, where a former residence was sold on or after 8 July 2015 and, at death, the deceased either owned a less valuable qualifying residential interest or held no such interest. In the latter case, a downsizing addition may be claimed provided that:
The estate includes no residential property interest at death (section 8FB).
The chargeable estate exceeds nil.
The deceased had a qualifying former residential interest (QFRI).
At least some of the estate is closely inherited.
A formal claim is made in accordance with section 8L of the Inheritance Tax Act 1984.
From the facts you have outlined, these conditions are satisfied. In particular, the cash and shares forming the estate constitute the “remainder of the chargeable estate” and, where inherited by lineal descendants, are regarded as being closely inherited for the purposes of the downsizing calculation. There is no requirement that the closely inherited assets must consist of residential property.
The Halifax funds and shares can be used in determining the value of the closely inherited portion of the estate against which the lost relievable amount (LRA) is tested to establish the downsizing addition. On this basis, the estate should be eligible to claim the RNRB, including a downsizing addition, subject to the standard calculation rules and any interaction with the nil rate band and transferable nil rate band, as well as consideration of the £44,000 lifetime gift made within seven years of death.
You don’t actually mention who receives the estate, if it all passes to direct dependents then the whole net estate value would be classed as ‘other assets passing to direct dependents’ if not you will need to deduct any legacies etc that are not passing to direct dependents….as long as the direct descendants receive more than the current RNRB you can claim the full £175,000.