Transferable Nil Rate Band - the amount of Allowance

Trusts Discussion
1

I am trying to seek some clarification which HMRC do not seem to be able to provide and the IHT Manual doesn’t seem clear.

An Estate I have has a RNRB allowance of £53k, this being the value of the deceased QRI after an equitable charge over the property she owned at the time of her passing. The spouse died in 2007 and as such did not use any of their RNRB.

HMRC are suggesting that there is £100,000 to transfer as death was before 6/4/17, however, the manual states it is simply calculated as the % of the Residential Enhancement at the death of the survivor.

My question is, if the value of the deceased’s interest is covered by their own RNRB (£53k), what, if anything can they transfer as a bought forward allowance.

Thanks,

Alan

2

The maximum RNRB for tax year 22/23or 23/24 is £175k.

If the deceased’s spouse died before 6.4.17 their RNRB would have been unused and thus available for carry forward. Hence, the deceased’s estate has a maximum RNRB which includes that brought forward of £175k plus 175k ie 350k.

However, the deceased’s estate available RNRB is capped at the value of the residence ie 53k.

The 100k figure would be relevant if downsizing had occurred.

Malcolm Finney