Residential Nil Rate Band & NRBDT charge & c/f RNRB calculation

Trusts Discussion
1

H died 2017, W died 2010 and a NRBDT was put in place to preserve money from care home fees and secured by means of a charge on the house and an IOU for the remainder. I am now concerned about there being IHT payable due to the c/f RNRB being reduced by the charge on the house. Am I right, can you please show me calculations so I can compare with mine? And, is there anything that can be done to rearrange the charge or anything so no IHT payable as it seems unfair when if the NRB charge hadn’t been used there would have been total NRBs available to cover the estate on second death.

So, the figures are as follows:

H net estate (before deducting NRB charge) £770,047
(Including house worth total £160, 000)

W NRB charge £272,408
(including charge on house of £70k)

W TRNB £17,592
(£325k - £35k legacies - £272,408 NRB charge)

I won’t show you my calculations thus far, so that we can see if you come to the same conclusions!

Thanks for your help!

Clare Presley
Ware & Kay

2

On H’s death although H has his own RNRB available of 100,000 is this not capped at 90,000 [160,000 - 70,000] and any c/f of W’s RNRB (ie 100,000) is lost ?

Malcolm Finney