RNRB & Downsizing

Trusts Discussion
1

H&W alive but W incapable and in Nursing Home. LPA in place with H and 2 daughters as attorneys.

Home sold with smaller home bought in both H&Ws names as TiC. H lives there alone. This took place after W moved into NH. New house worth £500K so £250K each.

I am amending Hs Will to a Discretionary Trust so can be flexible but with LoW to use his NRB/RNRB to his daughters/grandkids with IPDI to W (his estate approx. £800K including 1/2 house). Ws estate, inc 1/2 house, approx. £600K. Her NH fees are £50K per year so will reduce.

I am correct that for Ws estate, RNRB downsizing would apply as she lived in the previous home.

2

At the time of W’s death the newly acquired property will not be a home for her (ie she will not possess a qualifying residential interest at that time) and hence IHTA 1984 s8FA(1) will not be satisfied.

However, s8FB(1) will in principle be satisfied and hence a DA entitlement will be applicable. Inter alia, s8FB(4) is satisfied.

Malcolm Finney