Questions on residential nil rate band (IHT)

itwasntme001

Can someone confirm if the residential nil rate band (RNRB) is still intact for my parents if they have gifted a share in their residence to me/sibling?

Assuming my parents' share is still worth over £650k (which it would be quite comfortably), would they still get the full nil rate band, i.e. £1m in total?

Any thing i need to be consider with regards to the IHT/NRB/RNRB in respect to the fact that me/sibling owns a share in the property?

Also if the transfer was made to children not living at the property and no rent is paid to them, i udnerstand that the reservation of benefit rules apply and the share in the property will still be part of the parents estate for IHT calculation.  But does gift in the share of the property use up the TNRB if one of the parents die within 7 years of making the gift or would it be considered not a gift and therefore the gift would not use any of the nil rate bands of the person who died?

RAS

Your parents really really need to seek proper advice from a STEP solicitor based on their exact circumstances.

Not to rely on your understanding of some garbled messages based on the understanding of some random strangers on the internet with no qualifications. 

itwasntme001

RAS said:

Your parents really really need to seek proper advice from a STEP solicitor based on their exact circumstances.

Not to rely on your understanding of some garbled messages based on the understanding of some random strangers on the internet with no qualifications. 

My questions are all hypothetical and there has not been any gifts given.

I am sure there will be some helpful posters who know their stuff that can help me answer some fairly basic questions.

Keep_pedalling

You say no gifts have been given yet which is probably a good thing as this is rarely a good idea. If you and your sibling don’t live with your parents then this is a gift with reservation so the 7 year rule does not apply so is a pointless exercise as far as IHT planning is concerned and adds the complication of a CGT liability for both of you in the future.

It is still a bad idea if you do live with them as it looses you your first time buyer status and will cost you an additional 5% in SDLT when you do come to buy your own place.

itwasntme001

I understand that.  But say reservation of benefit does not apply and a child is gifted a share in the property and resides there, would this impact the residential nil band such that it is no longer applicable or otherwise impacted?

Will the full RNRB of £350k still apply?

RAS

What is the "reservation of benefit"?

p00hsticks

RAS said:

What is the "reservation of benefit"?

When people give away their property but continue to live in it (i.e. "reserve the benefit") without paying a market rent to the new owners

Keep_pedalling

itwasntme001 said:

I understand that.  But say reservation of benefit does not apply and a child is gifted a share in the property and resides there, would this impact the residential nil band such that it is no longer applicable or otherwise impacted?

Will the full RNRB of £350k still apply?

Yes it would, but is still not a great idea to do this.