IHT- Spouse continued to reside in property

Hi,

What are the implications for IHT if a husband and wife owned a property as tenants in common with a Form A restriction and mirror wills. Upon first dying their beneficial half share of property was left to the children, however the husband continued to live in the property.

Is my understanding correct that HMRC will deem the whole house as part of the husbands estate, as no children moved in to the residence and no market rent was paid to the children. With the Nil rate band from the first death lost/ un transferable, as it was used upon gift to said children.

No explicit trust or post death interest was mentioned in either will.

Thanks for any insights.

The fact that her husband continued living there, does not affect the position for IHT. The gift to the children, would’ve used part or all of the wife’s NRB and if needed the RNRB would also have been available.

Patrick Moroney