In 2013 before the advent of the Residential Nil Rate Band H & W made Wills leaving a flexible life interest in their estates to each other and then to their children.
The property owned as TIC sold for £575k in 2019 by which time W had lost her mental capacity and was already in a care home and H then moved into residential care.
Neither changed their Wills to limit the overriding powers relating to the property so the powers continued.
H died in August 2022 and the trust created and registered with HMRC.
W died in May 2023. The combined values of the Estates is around £700k
What actions if any can we take to revive the situation so we can claim one or both RNRB’s?
Have you considered the downsizing allowance provisions – ss.8FA – 8FE IHTA 1984?
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
As at the dates of death of H and W neither party possessed a qualifying residential interest it is necessary to examine the so-called “down-sizing” provisions as to whether any RNRB/TRNRBs are available.
On H’s death his estate passed to W on life interest. No RNRB applicable.
On W’s death as H had already died the gift of the prior interest to the life tenant, H, failed and so the remaindermens’ interests (ie the children) takes effect on W’s death. As the children are lineal descendants of W then W’s estate is entitled to its own RNRB plus a transfer of H’s unused RNRB