Residence nil rate band if property is sold during lifetime

aroominyork

[FONT=&quot]My father moved into a care home last year and now wants to sell his flat and distribute the proceeds to his children, ie while he is still alive. My question is whether the residence nil rate band would be applied to his estate when IHT is calculated after he dies, in the cases that i) he does not survive three years, ii) he survives over three years and taper relief kicks in, iii) he survives over seven years so the distribution becomes a gift.[/FONT]

Keep_pedalling

Yes, it will still ably unless the rest of his estate is not being left to his children.

Taper relief only applies on gifts over the nil rate band so will not apply if the flat is worth less than £325k, and even if it does apply it only applies to the portion over that rate.

The fact that he may require care for 7 years plus means you need to be aware of deliberate depreciation of assets should his remaining assets run out and he would no longer be able to fully self fund his care.