Residence requirement RNRB care home

Hi. I have a slightly unusual situation but I don’t think it can’t be unprecedented.

Wife has died owning the family home outright after husband transferred it to her by deed if gift. They had previously owned it as joint tenants prior to this and it had been their residence throughout their/her ownership until they both went into a care home a couple of years ago. The wife has recently died leaving a legacy to the children which is defined as the maximum amount that could be given without incurring a liability to IHT and the residue goes to her husband (mainly the family house). There aren’t enough other assets to satisfy the pecuniary legacy to the children without including part of the residence.

The question I have is will the surviving spouse be entitled to a RNRB? He will own a part of the property after his wife’s death and all his estate will go to his children but he has not actually lived in the house since he acquired his interest from his late wife as he is in a care home. However, he lived there with his wife and did live there as an owner in the 3 year period before he transferred his half share by deed of gift to his wife.

As a subsidiary point, I believe the legacy to the children will not benefit from including the RNRB amount (even though a share of the house will be needed to satisfy it) but the husband should be able to inherit his wife’s’ unused RNRB.

Thanks in anticipation.


Maybe not unprecedented, but I haven’t come across it before!! Maybe theirs have and will add their comments.

If on death of W the legacy to the children is in part satisfied by an appropriation of a part interest in the property (owned by W) W’s estate will. not be entitled to a RNRB. In this case there will be an unused amount of W’s RNRB in principle capable of being claimed by H, the surviving spouse.

Before considering the possible transfer of W’s unused RNRB the question is whether on H’s death his estate has its own RNRB entitlement. H acquires an interest in a property on W’s death from the date of W’s death. Is this interest a qualifying interest?

For the period from H’s date of inheriting an interest under W’s will to the date of his death H did not occupy the property as a residence. IHTA 1984 s 8H(2) seems to require that the property must have been H’s residence “… at a time when the person’s estate included THAT… interest in the dwelling house”. This is not the case (even though prior to H’s gift to W of his interest years earlier H’s interest would have been a qualifying residential interest (ie the property was occupied as H’s residence).

However, as mentioned above, at some time in the past H did have an interest in the property (50%) which he occupied as a residence (ie prior to the gift by H to W of H’s interest); ie a qualifying residential interest. But at the date of his death he did not own a qualifying residential interest. IHTA 1984 s 8F states in this case H’s RNRB is nil {s 8F(2)]. But IHTA 1984 s 8FB would suggest H’s estate is in principle entitled to a down-sizing allowance.

Malcolm Finney

Thank you for the reply. I am not sure I agree with the conclusion that H (who is still alive) does not have a “qualifying residential interest”

Looking at the definitions:

(2) [A] “residential property interest”, in relation to a person, means an interest in a dwelling-house which has been the person’s residence at a time when the person’s estate included that, or any other, interest in the dwelling-house".

After H’s death, as a residuary legatee H has an interest in a dwelling house. That dwelling house had been his residence “at a time” when his estate included that interest in a dwelling house (ie pre the 1987 gift the house would have been in his estate). It does not say estate at death just “at a time”. Doesn’t he meet that?

Thus if I am correct he has a “residential property interest”. It will be a qualifying one if
“a person’s estate immediately before the person’s death includes residential property interests in just one dwelling-house, the person’s interests in that dwelling-house are a qualifying residential interest in relation to the person”. As he inherits it under W’s will wont he meet that too?

I must confess when I tried to consider the implications of downsizing etc.I got completely confused! Presumably the downsizing provisions apply because in your view there is no qualifying residence on death and it was disposed of prior but as that was in 1987 wouldn’t that deny any relief at all because it was pre 2015?

I’d welcome any further thoughts!


I have reread your post…

I would comment as follows:

  1. After H gave the property to W presumably H continued to live there with W for a period of time. If so, H made a gift with reservation (GWR).

  2. Subsequently, H and W entered a care home. Residence in their property thus ceased at that time.

  3. W then died leaving a legacy to the children and residue to H.

  4. W on her death had a 100% qualifying residential interest in their home (as she had previously occupied it when it would have fallen into her estate). However, no part of the home was left to lineal descendants under her will; the home falling into residue which was left to H. Appropriation would not affect this (ie appropriation is not a “disposition”).

Hence, W’s estate was not entitled to a RNRB.

  1. On H’s death H possessed a qualifying residential interest in the home which was left to the children. H’s estate was therefore entitled to a RNRB.

  2. As W’s estate was not entitled to its own RNRB the unused part (ie 100%) would be transferable to H’s estate.

The exact amounts of RNRB available will depend upon the value of the home compared to the £175K maximum.

Implicit in the above is my understanding that on H’s death he possessed a qualifying residential interest under IHTA 1984 s8H because, despite not having any interest in the home until his inheritance under W’s will and then not living in the home, he had previously owned an interest in the home (at one time 100%) at a time when it would have formed part of his estate.

On moving into the care home H’s GWR ceased (ie H is treated at that time as making a PET) in which case on H’s death the home thus no longer formed part of H’s estate due to the GWR.

Malcolm Finney