Hello
I am dealing with H’s estate, just over £1m but there is a right of occupation for the W (2nd marriage), with the residuary estate, inc property passing to the deceased’s children (from first marriage).
Q.1 Is it possible to claim the TNRB & TRNRB for the first wife, who died in 1990?
Q.2 As there is a right to occupy for the surviving spouse, does that mean that the estate would lose the RNRB for husband?
Thank you.
Tina
Any unused allowance from the first marriage can be transferred, but the amount available to H’s estate is limited to 100% of the NRB and RNRB. ie no more than £325,000 and £175,000 can be claimed.
H’s estate cannot benefit from the RNRB as the interest is not going to direct descendants, but into trust for W (2nd marriage).
However, it may be claimed as a transferrable RNRB in W’s estate upon her eventual death.
If a home is held in a trust which gives a surviving spouse an interest in possession in the family home following the death of their spouse, and the home is held in a trust for the lifetime of the survivor (a life interest), provided the home is then inherited by their direct descendants when the surviving spouse (the life tenant) dies, their estate would be eligible for the RNRB.
IHTA 1984 Section 8J(5) confirms the above & 8K (3) confirms position regarding life tenant’s step child.
Also see IHTM46013.
Step-children are included as lineal descendants. Hence, on W’s death her estate is able to take advantage of her own RNRB plus that of H’s which was unused on H’s death.
If second wife (W2) is entitled to an interest in possession (IPDI) in the home for a limited time period at the end of which W2’s interest ceases and the home then passes to W2’s step-children the children have not “inherited” on the death of W2. Thus, on W2’s death, no RNRB is available wrt the home?
Malcolm Finney
Thank you both so much