Residential nil rate band transfer

getmore4less

Have you read the HMRC manual guidance on residential nil rate band 
IHTM46000 - Inheritance Tax Manual - HMRC internal manual - GOV.UK (www.gov.uk)

getmore4less

If you are going to need RNRB on B's death then if A died less than 2 years I think there is a window to reduce the asset base without loss of transferable nil rate band by utilising A's RNRB transferring up to £175k worth of property or assets to a qualifying beneficiary of A. 

tiengomar

tiengomar said:

but is the transferred allowance from spouse A and allowance available to Spouse B limited by the fact that spouse B then needs to nominate the property it applies to or can then difference between the RNRB allowances then be applied to the rest of the assets held by Spouse B?

hi i am reading it as we speak. It does not state however if to claim rnrb / downsizing one needs to fill iht400 even if there is no tax to pay. I guess iht400 needs doing if iht435 is submitted.

naedanger

tiengomar said:

ok many thanks for all your replies.
so the best solution appears to be that it would be worth making a deed of variation to redirect home of spouse A to child and claim downsizing allowance and transfer this to surviving spouse.

You are now talking about something different to the situation that started this thread, and now, having seen your previous posts, I can see why. 

However I think you might be better giving a complete factually description of the current situation in one post. It would be easier to understand what actions you have in mind.

tiengomar

naedanger said:

tiengomar said:

ok many thanks for all your replies.
so the best solution appears to be that it would be worth making a deed of variation to redirect home of spouse A to child and claim downsizing allowance and transfer this to surviving spouse.

You are now talking about something different to the situation that started this thread, and now, having seen your previous posts, I can see why. 

However I think you might be better giving a complete factually description of the current situation in one post. It would be easier to understand what actions you have in mind.

I wasn't deliberately trying to mislead.

Here is the situation.

spouse A has died with a property in her name worth around 90k and cash of 320k. Downsized from a property 265k two years ago.
spouse B has a house in his name worth 150k  and cash worth 400k.
So the aim is to maximize allowances to include use of each RNRB.
Spouse B currently inherits Spouse A estate but happy to change with DOV if it helps with tax.

naedanger

I didn't think you were trying to mislead, it is often better to simplify situations.
Did spouse B ever own the £265k property, and did spouse B ever live in it?

tiengomar

naedanger said:

I didn't think you were trying to mislead, it is often better to simplify situations.
Did spouse B ever own the £265k property, and did spouse B ever live in it?

no they have always kept houses in separate names.
yes spouse b lived in spouse A's home and viceversa.

naedanger

tiengomar said:

naedanger said:

I didn't think you were trying to mislead, it is often better to simplify situations.
Did spouse B ever own the £265k property, and did spouse B ever live in it?

no they have always kept houses in separate names.
yes spouse b lived in spouse A's home and viceversa.

Then I don't think your idea will work. I cannot see how spouse B can claim they ever owned the £265k property. 

tiengomar

naedanger said:

tiengomar said:

naedanger said:

I didn't think you were trying to mislead, it is often better to simplify situations.
Did spouse B ever own the £265k property, and did spouse B ever live in it?

no they have always kept houses in separate names.
yes spouse b lived in spouse A's home and viceversa.

Then I don't think your idea will work. I cannot see how spouse B can claim they ever owned the £265k property. 

so even a dov to the child now to cover the house will not help in the claim for rnrb to add to the nrb transferred to the existing spouse?

naedanger

tiengomar said:

naedanger said:

tiengomar said:

naedanger said:

I didn't think you were trying to mislead, it is often better to simplify situations.
Did spouse B ever own the £265k property, and did spouse B ever live in it?

no they have always kept houses in separate names.
yes spouse b lived in spouse A's home and viceversa.

Then I don't think your idea will work. I cannot see how spouse B can claim they ever owned the £265k property. 

so even a dov to the child now to cover the house will not help in the claim for rnrb to add to the nrb transferred to the existing spouse?

No, it will not help as far as I can see.

Sorry- previous text was wrong.