If the first spouse dies before 6 April 2017, is the transferable main residence nil rate band available to the surviving spouse doubled up to whatever the main residence nil-rate band is at the time of the second spouse’s death. Or, alternatively, is the amount available to transfer from the first spouse capped at £100,000.
Section 8G(4) of the Inheritance Tax Act 1984 suggests that it might be capped at £100,000; however, HMRC’s manual at IHTM46040 and IHTM46044 suggest that the brought forward amount will be 100% of the residential enhancement in force at the death of the surviving spouse or civil partner.
It is doubled up to whatever it is at the time of the 2nd death. It was drafted that way, so that deaths before 2017 would be treated the same as deaths in that tax year and get the same allowance of £100,000 at that time. It is hugely confusing, and I am sure there would have been an easier way of doing it, but we are where we are, and you can claim the double.
Important to bear in mind the possibility of tapering of the RNRB on the first death if their estate exceeded the £2m threshold as that will affect how much may be transferred