H owns residential property occupied by himself and second W.
H dies and leaves residential property on IPDI for W for life, remainder to his children.
Children putting pressure on W to release interest in IPDI in their favour. She would move to rented.
Would this preclude RNRB being available on W death or would her estate be able to claim the downsizing relief on the basis that the surrender was a disposal by her of a QRI?
On the basis that the IPDI beneficiary (W) possessed a QRI in the property (prior to disposal) and then disposed of her IPDI in lifetime, W would have made a disposition for QRI purposes and thus W would, at the time of her death, die without owning a QRI.
However, the downsizing provisions (IHTA 1984 s 8FB(1)) should then in principle apply on W’s death enabling a downsizing addition (DA).
A claim for a DA must be lodged.
Malcolm Finney