Would appreciate thoughts on the following:
Mr X died 2007. Wife was sole beneficiary. The estate was varied after death leaving a discretionary trust legacy of the NRB to spouse, issue and remoter descendants (there are two adult children). The estate was all transferred to the spouse, backed up agreement by her to repay the debt, £260,000 (which was the NRB at the time). The estate included the family home but I am not sure if this was held as joint tenants or tenants in common. She has now died and the debt will need to be repaid by her estate.
Her estate passes to her two children. Question is can we claim her late husband’s RNRB? We are able to claim hers.
Any advice appreciated.
From your post it appears that the NRB legacy was satisfied by the debt and the property passed to the wife. The husbands RNRB has not been used and should be available to bring forward subject to there being enough value in the property after the deduction of the debt as the RNRB will be restricted to the net value.
Greene & Greene
If the first death occurred before 6 April 2017, the only check that is required is the £2 million taper threshold.
Any unused RNRB can be transferred between spouses to be used when the survivor of them dies, regardless of when the first death occurred and whether or not the first deceased held a qualifying residential interest (that is, property ownership is not required by the first deceased).
The only check that is required is whether the first deceased’s estate was over £2 million. If the first death occurred before 6 April 2017, 100% of the RNRB will be available to be transferred when the surviving spouse subsequently died, unless the estate was over £2m. This is the case regardless of whether or not the first to die owned a qualifying residential interest.
You only need to deduct the debt from the value of the house if it is set up as a charge on the house. If it is an unsecured IOU arrangement then this does not apply.