Residence nil-rate band allowance can also be transferred from a pre-deceased spouse

markval

We know you can transfer any unused £325K IHT allowance from a spouse who pre-deceased.
We know that since 2017 you can claim £175K 'Residence nil-rate band'.
What wasn't obvious (to me) is that when dealing with the estate of the second-in-a-marriage to die, you can also transfer an additional £175K Residence nil-rate band, even if the first person died years before RNRB was even thought of.
I had initially assumed that if the first death was before RNRB was introduced, there could be no allowance to transfer - WRONG.
Don't miss out!

getmore4less

Its the other way round, because death was before RNRB  came in it could not have been used so is 100% unused

For both nil rate bands it is not the allowance that transfers but as a % unused. that gets applied to the current allowance.

The RNRB total is only the first hurdle,  there also has to be qualifying property AND qualifying beneficiaries.

markval

In this case, it's the same property at times of first and second death, so presumably no question there.

The only slight doubt I have is that it says you can claim RNRB if the estate is over the IHT threshold.

That could mean, if at the time of the /first/ death, the estate was NOT over the IHT threshold, it would not qualify for a retrospective RNRB to be transferred. [shrug]

But as IHT436 demands details of the first death, HMRC can make that determination

Keep_pedalling

markval said:

In this case, it's the same property at times of first and second death, so presumably no question there.

The only slight doubt I have is that it says you can claim RNRB if the estate is over the IHT threshold.

That could mean, if at the time of the /first/ death, the estate was NOT over the IHT threshold, it would not qualify for a retrospective RNRB to be transferred. [shrug]

But as IHT436 demands details of the first death, HMRC can make that determination

It’s the value of the estate at the time of the second death that counts. Whether it is the same house or not does not come into it. Even if at the time of the first death no property was owned the transferable RNRB can still be claimed on the second death.